TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

A Member of the Law Professor Blogs Network

Friday, April 11, 2014

Crawford & Blattmachr: Planning With Portability Do-Overs

Tax Analysys Logo (2013)Bridget J. Crawford (Pace) & Jonathan G. Blattmachr (Interactive Legal Systems), Planning With Portability Do-Overs (But Only for a Limited Time), 143 Tax Notes 117 (Apr. 7, 2014):

In this article, the authors discuss Rev. Proc. 2014-18, in which the IRS provides some estates with a simplified method for making a portability election and having that election treated as timely even though the statutory deadline may have passed. The authors suggest that once the estate tax exemption of a first spouse to die has been preserved under Rev. Proc. 2014-18, an effective estate plan for the surviving spouse may include creating and funding a lifetime trust structured as a grantor trust.

April 11, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Wednesday, April 2, 2014

Johnson: Reforming the § 183 Hobby Loss Rules

Tax Analysys Logo (2013)Calvin H. Johnson (Texas), Horse Losses and Other Pleasures, 142 Tax Notes 443 (Apr. 1, 2014):

Current law denies the deduction of losses from equestrian and other such activities if not undertaken for profit. The IRS wins almost all the contested cases, but the test is too indeterminate for the Service to enforce on a tax return.

The following proposal would defer the deduction of business losses until the claimed future income from the activity comes in. Loss deferral would apply automatically to activities specified by statute, including those associated with horses, dogs, airplanes, cars, and collectibles, and to activities from which significant participants derive recreation or pleasure. Deferral is limited to activities suppressed as a result of recreational value to encourage the general diversification of investments and to allow room for congressionally intended tax incentives.

Continue reading

April 2, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (1)

Thursday, March 27, 2014

Tax Analysts Hosts Conference Today on Is It Time For a Taxpayer Bill of Rights?

TA ConfTax Analysts hosts a roundtable discussion on Taxpayers and the IRS: Is It Time For a Taxpayer Bill of Rights? at the National Press Club in Washington, D.C. today at 9:00 - 11:00 a.m. EST:

On January 9, 2014, National Taxpayer Advocate Nina E. Olson released the 2013 Annual Report to Congress, urging the IRS to implement administratively a comprehensive, principle-based TBOR. That proposal, comprising 10 rights modeled on the U.S. Constitution's Bill of Rights, is designed to strengthen the IRS’s ability to serve taxpayers. However, the lack of resources needed to implement these rights could prevent the IRS from proceeding. The speakers and the conversation that follows will provide a historical perspective on prior legislation, discuss recommendations for adopting a TBOR, and debate the timing and politics involved in its implementation.

  • Nina E. Olson (National Taxpayer Advocate)
  • Christopher S. Rizek (Caplin & Drysdale, Washington, D.C.)
  • Alan J. Wilensky (Former Acting Assistant Secretary for Tax Policy, U.S> Treasury Department)
  • Moderator:  Christopher E. Bergin (President and Publisher, Tax Analysts)

March 27, 2014 in Conferences, Tax, Tax Analysts | Permalink | Comments (0)

Wednesday, March 19, 2014

Senior IRS Lawyer Charges Chief Counsel's New York Office With Waste and Abuse

Tax Analysys Logo (2013)David Cay Johnston (Syracuse), Attorney Details Mismanagement in IRS Chief Counsel's New York Offices, 2014 TNT 53-1 (Mar. 19, 2014):

A veteran IRS lawyer opened a window on the secretive operations of one of the biggest IRS field offices March 18, telling 10 senators in a letter that the Office of Chief Counsel ignores serious problems of waste and employee abuse in two New York offices.

Jane Kim, a 10-year veteran chief counsel attorney for the Small Business/Self-Employed Division, wrote that "a sustained pattern of abuse" by chief counsel's supervising lawyers in Manhattan and Long Island, has led to "gross waste of government resources, gross mismanagement, violation of labor laws, and active abuse and retaliation against employees."

The complaint depicts a workplace culture in which favored employees are given light workloads, while their colleagues who pick up the slack face discipline and retaliation if they chafe at unfair treatment. Meanwhile management turns a blind eye to the problems -- when it isn't actively making them worse.

As a result of that negligence, tax cheats often get away without paying, taxpayers needing help go unaided, and good employees suffer more stress in an agency already struggling to deal with budget cuts and public scorn. ...

Continue reading

March 19, 2014 in IRS News, Tax, Tax Analysts | Permalink | Comments (3)

Monday, March 10, 2014

Call for Student Papers: Tax Notes, State Tax Notes, and Tax Notes International

Tax Analysys Logo (2013)Call For Entries: Tax Analysts’ Inaugural Student Paper Competition:

Tax Analysts’ Tax Notes, State Tax Notes, and Tax Notes International magazines are now accepting submissions for the inaugural student paper competition. Winning contestants will have their papers published in a well-established and reputable magazine.

Students must be enrolled in a law, economics, or tax postgraduate program. Papers should be between five and 25 pages long and focus on an unsettled question of tax law or tax policy. Submissions will be judged on argument, content, grammar, and overall quality and should include a cover letter providing information about the author and a short abstract about the paper.

Each magazine will choose at least one, but no more than five, high-quality papers for publication. Papers must not have been published elsewhere.

Submissions should be sent to [email protected] by May 31 and will be published in the summer of 2014.

March 10, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

The Tax Implications of Spring Break

Tax Analysys Logo (2013)Billy Hamilton, Where the Bucks Are: The Fiscal Realities of Spring Break, 71 State Tax Notes 587 (Mar. 10, 2014):

Hamilton describes the annual pilgrimage college students make to sunnier climes during spring break. Hamilton says there’s more to the ritual than sun and beer, and that it’s both a boon and a bane for those cities frequented by students. He outlines the costs and tax implications for the local governments of spring break destinations.

Fort

March 10, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (1)

Wednesday, February 26, 2014

Burke & McCouch: Woods: A Path Through the Penalty Maze

Tax Analysys Logo (2013)Karen C. Burke (Florida) & Grayson M.P. McCouch (Florida), Woods: A Path Through the Penalty Maze, 142 Tax Notes 829 (Feb. 24, 2014):

In this report, Burke and McCouch discuss the Supreme Court’s Woods decision concerning partnership-level penalty jurisdiction in proceedings under the 1982 Tax Equity and Fiscal Responsibility Act, and they explore the implications of the decision for subsequent partner-level proceedings.

February 26, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Wednesday, February 19, 2014

Morse: A Simpler Offshore Profits Transition Tax

Tax Analysys Logo (2013)Susan C. Morse (Texas), A Simpler Offshore Profits Transition Tax, 73 Tax Notes Int'l 629 (Feb. 17, 2014):

Susan C. Morse proposes a simpler corporate transition tax to deal with the large amounts of cash parked offshore by multinational companies.

February 19, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Tuesday, February 18, 2014

Serreze: Science, Taxes, and Bonds

Tax Analysys Logo (2013)Peter H. Serreze (Ropes & Gray, Boston), As Simple as It Can Be but Not Simpler:  Science, Taxes, and Bonds, 142 Tax Notes 729 (Feb. 17, 2014):

With the recent and potential future decline in governmental funding, many nonprofit research organizations are increasingly venturing into the world of commerce. This report examines the issues raised by this trend under the tax law restrictions applicable to the use of facilities financed with tax-exempt debt.

February 18, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Tuesday, February 11, 2014

Feld: The Constitutionality of the Cash Parsonage Allowance

Tax Analysys Logo (2013)Alan L. Feld (Boston University), The Constitutionality of the Cash Parsonage Allowance, 142 Tax Notes 667 (Feb. 10, 2014):

Professor Zelinsky has made a valiant effort to defend the constitutionality of section 107(2), the provision that excludes from gross income cash housing allowances of a minister of the gospel. [The First Amendment and the Parsonage Allowance, 142 Tax Notes 413 (Jan. 27, 2014).].  A U.S. district court granted summary judgment to plaintiffs attacking the provision on First Amendment and Equal Protection grounds. Zelinsky criticizes the decision for failing to give due weight to the secular purposes of the exemption. Unfortunately, Zelinsky's argument is ultimately unpersuasive.

February 11, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (2)

Monday, February 3, 2014

WSJ: Private Equity Firms Save Millions in Taxes by Treating Dividends as 'Monitoring Fees,' Says Polsky

Wall Street Journal:  Private-Equity Firms' Fees Get a Closer Look: Industry May Be Underpaying Taxes by Misrepresenting Payments, by Mark Maremont:


ImageGregg D. Polsky, a tax-law professor, has long been a thorn in the side of the private-equity industry. Now he is at it again.

In 2009, Mr. Polsky wrote an article criticizing a strategy that allowed many fund executives to save on taxes by converting ordinary fee income into capital gains taxed at substantially lower rates. [Private Equity Management Fee Conversions, 122 Tax Notes 743 (Feb. 9, 2009).] The IRS later started examining the propriety of the practice, called a management-fee waiver, and recently said it plans to issue new guidance on it.

In a new article published over the weekend, Mr. Polsky takes aim at the tax treatment of another revenue stream for private-equity firms, called monitoring fees. [The Untold Story of Sun Capital: Disguised Dividends, 142 Tax Notes 556 (Feb. 3, 2014)]  He claims the industry may be underpaying federal corporate taxes by hundreds of millions of dollars a year by mischaracterizing these fees.

Continue reading

February 3, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Thursday, January 30, 2014

Zelinsky: The First Amendment and the § 107 Parsonage Allowance

Tax Analysys Logo (2013)Edward A. Zelinsky (Cardozo),  The First Amendment and the Parsonage Allowance, 142 Tax Notes 413 (Jan. 27, 2014):

In this report, Zelinsky criticizes the recent district court decision in Freedom From Religion Foundation Inc. v. Lew, declaring section 107(2) unconstitutional on First Amendment grounds. The provision excludes from gross income cash housing allowances furnished to ministers. Zelinsky details three interrelated reasons why the district court’s opinion is unpersuasive.

Prior TaxProf Blog coverage:

January 30, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Monday, January 27, 2014

Johnston: Give to Charity, Turn a Profit

Tax Analysys Logo (2013)David Cay Johnston (Syracuse), Give to Charity, Turn a Profit, 71 State Tax Notes 225 (Jan. 27, 2014):

Arizona lawmakers let some donors make charitable gifts in a way that makes the donors richer, a trend sure to spread unless Congress stops it.

All Tax Analysts content is available through the LexisNexis® services.

January 27, 2014 in Tax, Tax Analysts | Permalink | Comments (5)

Wednesday, January 22, 2014

Individual Tax Reform in a Time of Crisis

Tax ReformLuca Gattoni-Celli, Scholar Calls for 'Distributive Justice' in Charitable Tax Reform, 2014 TNT 13-7 (Jan. 21, 2014):

Tax subsidies for charitable giving need to be reformed with an eye toward "distributive justice," a tax law professor said at a conference on tax reform on January 17.

Miranda Perry Fleischer of the University of San Diego School of Law said the activities of charitable organizations should be examined to ensure they are benefiting the economically disadvantaged.

The discussion was part of a tax reform symposium in Malibu, Calif., organized by Pepperdine University School of Law and cosponsored by Tax Analysts. ...

Emory Law School professor Dorothy Brown cited research suggesting that racial minorities are adversely affected by the tax system. Pivoting from a study of her own that compared the Obamas' tax returns from 2000 through 2004 with tax return data from white taxpayers earning similar incomes, Brown focused on racial disparities in tax outcomes, saying middle-income African-Americans pay higher taxes on average than their economic peers.

All Tax Analysts content is available through the LexisNexis® services.

January 22, 2014 in Conferences, Scholarship, Tax, Tax Analysts | Permalink | Comments (1)

Tuesday, January 7, 2014

Wright: Short Sales as Nonrecourse Mortgages

Tax Analysys Logo (2013)Kathleen K. Wright (Golden Gate), Short Sales as Nonrecourse Mortgages, 71 State Tax Notes 27 (Jan. 6, 2014):

Short sales in states that have enacted anti-deficiency statutes can now be treated as nonrecourse mortgages if the state statute bars collection of a deficiency balance by the lender after the borrower and lender agree that the lender will accept a loan payoff for less than what is owed on the mortgage and release the lender's security interest in the property. In a letter from the IRS to U.S. Sen. Barbara Boxer, D-Calif., released to the public in November 2013, the IRS concluded that an obligation involved in a short sale would be treated as a nonrecourse obligation under California Code of Civil Procedure (CCP) section 580e for federal income tax purposes. This disclosure was followed by a letter from California Franchise Tax Board Chief Counsel Jozel Brunett to California State Board of Equalization member George Runner, dated December 4, 2013, wherein the FTB stated that they would conform to the federal guidance. This result could provide significant tax benefits to clients who engaged in a short sale of their homes.

All Tax Analysts content is available through the LexisNexis® services.

January 7, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Monday, January 6, 2014

The IRS Scandal, Day 242: Lois Lerner Is 2013 Tax Person of the Year

Tax Analysys Logo (2013)The 2013 Tax Person of the Year: Lois Lerner, 142 Tax Notes 7 (Jan. 6, 2014):

Last year was a struggle for the IRS. The effects of years of frozen or cut budgets began to take their toll on tax administration. The agency had a tough tax season because of the late passage of the American Taxpayer Relief Act of 2012. Guidance for the Foreign Account Tax Compliance Act and the Affordable Care Act was slow in coming. And, of course, the IRS spent the last eight months dealing with a major controversy involving the handling of exempt organization applications.

While many of the Service's problems were not necessarily its own fault, the exempt organization scandal was an almost entirely self-inflicted wound. No one personifies that scandal more than Lois Lerner.

Lerner ignited a political and media firestorm when she confessed in May that the exempt organizations unit of the IRS Tax-Exempt and Government Entities Division inappropriately handled many Tea Party groups' exemption applications.

mThe now former exempt organizations director's admission and subsequent refusal to testify before Congress contributed to her becoming the public face of the scandal. Although Lerner does not bear sole responsibility for the IRS's missteps in processing conservative groups' exemption applications, the publicity of her role in one of the year's biggest news stories earns her the distinction of being Tax Notes' 2013 Person of the Year.

All Tax Analysts content is available through the LexisNexis® services.

Continue reading

January 6, 2014 in IRS News, IRS Scandal, Tax, Tax Analysts | Permalink | Comments (0)

Saturday, December 28, 2013

State Tax Person of the Year: Richard Pomp (UConn)

Tax Analysys Logo (2013)Person of the Year, 70 State Tax Notes 715 (Dec. 23, 2013):

State Tax Notes is pleased to announce its annual year in review edition, featuring person of the year, given to the individual or organization that had the most influence on state tax policy and practice. The editorial staff has compiled a list of the best in our profession in five categories: academics, practitioners, organizations, administrators, and lawmakers.

This year's person and academic of the year is Richard Pomp for his pro bono work as the hearing officer for the Multistate Tax Commission's proposed amendments to Article IV of the Multistate Tax Compact. The compact's apportionment formula, Article IV, incorporates nearly verbatim the Uniform Division of Income for Tax Purposes Act as drafted in 1957.

All Tax Analysts content is available through the LexisNexis® services.

December 28, 2013 in Legal Education, Tax, Tax Analysts | Permalink | Comments (0)

Thursday, December 26, 2013

Christians: What the Baucus International Tax Reform Plan Reveals About Tax Competition

Tax Analysys Logo (2013)Allison Christians (McGill), What the Baucus Plan Reveals About Tax Competition, 72 Tax Notes Int'l 1113 (Dec. 23, 2013):

Conventional wisdom explains tax competition as an external constraint on lawmaking: All countries compete for investment in a global capital market, and therefore each is forced, as by an incontrovertible law of nature, to lure investment into their jurisdiction with attractive tax policies. Conventional wisdom then also surmises that the only way governments can curb tax competition is by working together cooperatively to eliminate beggar-thy-neighbor tax policies. The international tax reform plan recently introduced by Sen. Max Baucus, D-Mont., squarely confronts both parts of this conventional wisdom and reveals some very disturbing observations about tax competition: that it is as much a supply-side as a demand-side problem (luring strategies require a supply of otherwise tax-favored capital), that governments have always had the power to counter this problem, and that accordingly, political will is the reason why tax competition has become the overwhelming force that it is today.

All Tax Analysts content is available through the LexisNexis® services.

December 26, 2013 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Monday, December 23, 2013

Johnston: District Court Rebukes IRS Church Plan Rulings

Tax Analysys Logo (2013)David Cay Johnston (Syracuse), District Court Rebukes IRS Church Plan Rulings, 141 Tax Notes 1349 (Dec. 23, 2013):

Johnston reports on the first court case in an expanding effort to exempt pension plans from ERISA on religious grounds. The decision implicitly criticizes the IRS Office of Chief Counsel.

All Tax Analysts content is available through the LexisNexis® services.

December 23, 2013 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Monday, December 16, 2013

Bartlett: Tax Policy and the Bible

Tax Analysys Logo (2013) Bruce BartlettTax Policy and the Bible, 141 Tax Notes 1231 (Dec. 16, 2013):

In this article, Bartlett uses a recent statement by Pope Francis to examine what the Bible says about tax policy. He finds that academic opinion about biblical principles of taxation has shifted in a more progressive direction over the last 10 years.

All Tax Analysts content is available through the LexisNexis® services.

Prior TaxProf Blog coverage:

December 16, 2013 in Scholarship, Tax Analysts | Permalink | Comments (1)

Monday, December 9, 2013

Johnston: Billions of Tax Dollars Later, No New Jobs for New York

Tax Analysys Logo (2013)David Cay Johnston (Syracuse), Billions of Tax Dollars Later, No New Jobs for New York, 70 State Tax Notes 609 (Dec. 8, 2013):

The fast-increasing use of tax incentives by all 50 states has failed to increase jobs or investment, two respected experts on state tax policy found after reviewing more than 50 years of giveaways. [Marilyn M. Rubin & Donald J. Boyd, New York State Business Tax Credits: Analysis and Evaluation (Nov. 2013).]

This year, state government subsidies to corporations, partnerships, and other businesses in New York state alone will total $1.7 billion, triple the giveaways in 2005, according to the new study. That's $235 taken from the average Empire State household this year and redistributed to business owners on the theory that redistribution will create jobs.

During those years, the number of jobs in New York declined, the state's official jobs data website shows. The total number of New Yorkers employed in 2012 was down 175,000, or 2 percent, compared with 2005. Think of it this way: Over nine years, the state of New York gave businesses roughly $10 billion, or almost $1,400 from each household, in a jobs program that eliminated 175,000 jobs at an average cost of $57,000.

All Tax Analysts content is available through the LexisNexis® services.

December 9, 2013 in Scholarship, Tax, Tax Analysts | Permalink | Comments (1)

Monday, December 2, 2013

Lobel: Eliminate the Corporate Income Tax and Level the Playing Field

Tax Analysys Logo (2013)Martin Lobel (Lobel Novins & Lamont, Washington, D.C.), Eliminate the Corporate Income Tax and Level the Playing Field, 141 Tax Notes 967 (Dec. 2, 2013):

Lobel offers a proposal that would level the playing field between traditional C corporations and passthrough business entities, while achieving the goals of simplicity and fairness.

All Tax Analysts content is available through the LexisNexis® services.

December 2, 2013 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Tuesday, November 26, 2013

Clarifying the Meaning of 'Beneficial Owner' in Tax Treaties

Tax Analysys Logo (2013)Koichiro Yoshimura (LL.M. (Tax) 2014, NYU),  Clarifying the Meaning of 'Beneficial Owner' in Tax Treaties, 72 Tax Notes Int'l 761 (Nov. 25, 2013):

Koichiro Yoshimura looks at the meaning of the term "beneficial owner" in the OECD model income tax treaty, and through a functional analysis, attempts to set reasonable and more acceptable beneficial ownership criteria.

All Tax Analysts content is available through the LexisNexis® services.

November 26, 2013 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Friday, November 22, 2013

Johnson: Ordinary Medical Expenses

Tax Analysys Logo (2013)Calvin H. Johnson (Texas), Ordinary Medical Expenses, 141 Tax Notes 773 (Nov. 18, 2013):

Calvin H. Johnson argues that taxpayers should bear ordinary medical expenses out of their post-tax income with no further allowance beyond personal exemptions, the standard deduction, and low tax brackets.

All Tax Analysts content is available through the LexisNexis® services.

November 22, 2013 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Monday, November 18, 2013

An Interview With Darien Shanske

Tax Analysys Logo (2013)Jennifer Carr, An Interview With Darien Shanske, 70 State Tax Notes 447 (Nov. 18, 2013):

State Tax Notes legal editor Jennifer Carr interviews professor Darien Shanske about his new theory of state taxation, under which the corporate income tax, which is increasingly apportioned using a single-salesfactor formula and destination-based sourcing, can act as a complement to the retail sales tax.

All Tax Analysts content is available through the LexisNexis® services.

November 18, 2013 in Tax, Tax Analysts | Permalink | Comments (0)

Wednesday, November 13, 2013

Cummings: Tax Decisions of the Supreme Court's 2012 Term

Tax Analysys Logo (2013)Jasper L. Cummings, Jr. (Alston & Bird, Raleigh, N.C.), Tax Decisions of the Supreme Court's 2012 Term, 141 Tax Notes 635 (Nov. 11, 2013):

In its just completed 2012 term, the Supreme Court decided only three federal tax cases. The most politically important decision was Windsor, which held the Defense of Marriage Act unconstitutional. One criminal case, Davila, marked the long, slow decline of the Warren Court’s limited view of harmless error. PPL ... was the only real tax decision of the term. Finally, a nontax decision, Horne, raises questions about state tax procedures that preclude consideration of constitutional issues in administrative hearings.

All Tax Analysts content is available through the LexisNexis® services.

November 13, 2013 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Tuesday, November 5, 2013

Hyans & Nogid: A Mutiny Against Tax Bounty Hunters Is Long Overdue

Tax Analysys Logo (2013)Hollis L. Hyans & Amy F. Nogid (both of Morrison & Foerster, New York), A Mutiny Against the Bounty Hunters Is Long Overdue, 70 State Tax Notes 299 (Nov. 4, 2013):

Hollis L. Hyans and Amy F. Nogid examine the use of contingent fee auditors for revenue collection, arguing that those arrangements taint the process, raise confidentiality issues, and may result in decreased accountability and increased costs to the government.

All Tax Analysts content is available through the LexisNexis® services.

Dog

November 5, 2013 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Monday, November 4, 2013

Sullivan: Will International Tax Reform Slow U.S. Technology Development?

Tax Analysys Logo (2013)Martin A. Sullivan (Tax Analysts), Will International Tax Reform Slow U.S. Technology Development?, 141 Tax Notes 459 (Nov. 4, 2013):

Martin A. Sullivan looks at how various tax rules interact to subsidize research and development and how U.S. tax reform could affect those provisions.

All Tax Analysts content is available through the LexisNexis® services.

November 4, 2013 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Friday, November 1, 2013

The Foreign Tax Credit After PPL

Tax Analysys Logo (2013)Courtney Gesualdi (Ropes & Gray, Boston),  After PPL: How to Bring Congressional Intent Back to the Foreign Tax Credit Applicability Decision, 72 Tax Notes Int'l 355 (Oct. 28, 2013):

Courtney Gesualdi argues that the development of cases involving the foreign tax credit has caused a separation between the intent of section 901 and how it has come to be applied by the courts; Gesualdi offers suggestions to help guide the courts in cases similar to PPL v. Commissioner.

All Tax Analysts content is available through the LexisNexis® services.

November 1, 2013 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Thursday, October 31, 2013

Inflation Adjustments Affecting Individual Taxpayers in 2014

Tax Analysys Logo (2013)James C. Young (Northern Illinois University, College of Business), Inflation Adjustments Affecting Individual Taxpayers in 2014, 141 Tax Notes 413 (Oct. 28, 2013):

In this report, Young discusses 2014 inflation adjustments to parts of the individual tax system that are tied to a consumer price index year ending in August. Items adjusted by this index include the tax rate schedules, standard deductions and exemption and itemized deduction phaseouts, several minimum tax items, the gift and estate tax exclusions, and some computational elements related to the unearned income of minor children, the child credit, the earned income tax credit, adoption expenses, educational savings bonds, education credits, education loan interest, qualified transportation fringe benefits, medical savings accounts (Archer MSAs), health savings accounts, long-term care insurance premiums, long-term care insurance benefits, traditional and Roth IRA income phaseouts and contribution limits, and the section 179 expense election. Implications of the expiring provisions from tax legislation passed in the early 2000s also are discussed.

All Tax Analysts content is available through the LexisNexis® services.

October 31, 2013 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Monday, October 28, 2013

Washington Post Profile of Marty Sullivan

SullivanWashington Post, Marty Sullivan Figured Out How the World’s Biggest Companies Avoided Billions in Taxes. Here’s How He Wants to Stop Them:

It was a humbling experience for the chief executive of the world’s most valuable company. Hauled before a Senate panel, Apple’s Tim Cook had to explain how an American company whose American engineers had created the iPhone and the iPad was able to avoid paying any taxes on billions of dollars in profits generated by those products — not to United States, not to any country. The only defense the Cook could conjure up for Apple “stateless” income was that it was all perfectly legal.

A few miles away in Arlington, a 55-year-old economist named Marty Sullivan sat on a folding metal chair at a card table in the garage of his modest brick home and watched the hearing unfold on his laptop computer. Sullivan is one of those unheralded members of the permanent Washington establishment who make things work, at least when the politicians let them. And for two decades, from the same home office, Sullivan has been exposing the tax-dodging schemes of multinational corporations in the columns of Tax Notes, a must-read publication for tax lawyers, accountants and policy wonks.

It was Sullivan who shined an early light on how companies had finagled “transfer prices” — the price one division charges another for parts or services — to shift profits to low-tax jurisdictions.

It was Sullivan who had called out the big drug and tech companies for transferring ownership of their patents and trademarks — the source of much of their profits — to subsidiaries in Ireland and other low-tax jurisdictions.

It was Sullivan who highlighted the absurdity of tax havens in which just a handful of multinationals claimed to earn annual profits that were several times the country’s entire GDP.

And it was Sullivan who in 2010 pieced together from public filings that Apple had understated its reported profits to hide the fact that it was paying a tax rate of less than 2 percent on its overseas profits, shining the spotlight on Apple’s tax avoidance schemes.

(Hat Tip: Joseph Burke, Bob Kamman.)

October 28, 2013 in Tax, Tax Analysts | Permalink | Comments (1)

Wednesday, October 23, 2013

Pepperdine/Tax Analysts Symposium: Tax Reform in a Time of Crisis

2014TaxSaveTheDatePlease consider joining us for the Pepperdine/Tax Analysts Symposium on Tax Reform in a Time of Crisis on Friday, January 17, 2014 in Malibu, California:

Keynote Address:  Joseph Bankman (Stanford)
Introduction:  Paul Caron (Pepperdine)
Commentary:  Edward Kleinbard (USC)

Panel #1:  Individual/Estate and Gift Tax Reform
Moderator:  Tom Bost (Pepperdine)
Papers:  Dorothy Brown (Emory), Miranda Fleischer (San Diego), James Repetti (Boston College)
Commentary:  Nancy Staudt (USC)

Luncheon Address:  Bruce Bartlett (Former Deputy Assistant Secretary of the Treasury)

Panel #2:  Business/International Tax Reform
Moderator:  Khrista Johnson (Pepperdine)
Papers:  Karen Brown (George Washington), Ruth Mason (Virginia), Richard Winchester (Thomas Jefferson)
Commentary:  Eric Zolt (UCLA)

Panel #3:  Tax Reform in a Time of Crisis: Institutional Perspectives
Moderator:  Joe Thorndike (Tax Analysts)
Papers:  Ellen Aprill (Loyola-L.A.), Donald Tobin (Ohio State), George Yin (Virginia; former Chief of Staff, Joint Committee on Taxation)
Commentary:  Donald Korb (Partner, Sullivan & Cromwell; former IRS Chief Counsel)

Closing Remarks:  What Have We Learned Today?:  Robert Popovich (Pepperdine)

October 23, 2013 in Conferences, Legal Education, Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Monday, October 21, 2013

Gibbs: Loving and the Treasury's Authority to Regulate Tax Return Preparers

Tax Analysys Logo (2013)Lawrence B. Gibbs (Miller & Chevalier, Washington, D.C.;  former IRS Commissioner (1986-89)),   Loving v. IRS: Treasury's Authority to Regulate Tax Return Preparers, 141 Tax Notes 331 (Oct. 21, 2013):

Earlier this year a federal district court held that Treasury lacked the authority to issue regulations in 2011 enabling the IRS to regulate the tax return preparation conduct of unregulated, commercial preparers who process more than 42 million individual federal income tax returns each year [Loving v. United States, No. 12-385 (D.C. D.C. Jan. 18, 2013)]. Gibbs explains why Treasury has the authority to issue the regulations and why the district court decision should be reversed.

All Tax Analysts content is available through the LexisNexis® services.

October 21, 2013 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Wednesday, October 16, 2013

McMillan: Transferee Shareholders and the Long Arm of the IRS

Tax Analysys Logo (2013) Lori McMillan (Washburn), Transferee Shareholders and the Long Arm of the IRS, 141 Tax Notes 223 (Oct. 14, 2013):

McMillan discusses United States v. Holmes [Nos. 12–1164, 12–1220 (10th Cir. Aug. 23, 2013)] and concludes that it has made liability management more challenging for the nonresident shareholder and has created problems for the unwary.

All Tax Analysts content is available through the LexisNexis® services.

October 16, 2013 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Monday, October 14, 2013

Shay, Fleming & Peroni: Territoriality in Search of Principles and Revenue

Tax Analysys Logo (2013)Stephen E. Shay (Harvard), J. Clifton Fleming Jr. (BYU) &  Robert J. Peroni (Texas), Territoriality in Search of Principles and Revenue: Camp and Enzi, 72 Tax Notes Int'l 155 (Oct. 15, 2013):

Stephen E. Shay, J. Clifton Fleming Jr., and Robert J. Peroni argue that unless a shift to an exemption system for taxing foreign income would constitute a material improvement over current law, the transition costs of such a change would outweigh the benefits.

All Tax Analysts content is available through the LexisNexis® services.

October 14, 2013 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Wednesday, October 9, 2013

Herzig: The Estate and Gift Tax Implications of Windsor

Tax Analysys Logo (2013)David J. Herzig (Valparaiso), Same-Sex Marriage and Estate Taxes: Why Windsor Is Still at Issue, 141 Tax Notes 79 (Oct. 7, 2013):

David J. Herzig discusses the estate and gift tax implications of United States v. Windsor.

All Tax Analysts content is available through the LexisNexis® services.

October 9, 2013 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Monday, October 7, 2013

Johnston: The Importance of State Tax Tribunals

Tax Analysys Logo (2013)David Cay Johnston (Syracuse), The Importance of Tax Tribunals, 70 State Tax Notes 35 (Oct. 7, 2013):

David Cay Johnston discusses the importance of state tax tribunals and fair administration of justice in tax disputes.

All Tax Analysts content is available through the LexisNexis® services.

October 7, 2013 in Scholarship, Tax, Tax Analysts | Permalink | Comments (1)

Wednesday, October 2, 2013

Kennedy: DOMA Implications for Employee Benefit Plans

Tax Analysys Logo (2013)Kathryn J. Kennedy (John Marshall), DOMA Implications for Employee Benefit Plans, 140 Tax Notes 1571 (Sept. 30, 2013):

Kathryn J. Kennedy highlights the effect Windsor will have on employee benefit plans and federal laws relying on Defense of Marriage Act section 3.

All Tax Analysts content is available through the LexisNexis® services.

October 2, 2013 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Wednesday, September 25, 2013

The IRS Scandal: Rearranging the Deck Chairs on the Titanic

Tax Analysys Logo (2013)Alan J. Wilensky (Attorney, Minneapolis), Scandal at the IRS: Rearranging the Deck Chairs on the Titanic, 140 Tax Notes 1449 (Sept. 23, 2013):

This article discusses the IRS’s recent problems in the exempt organizations area. It recommends that these and other problems the agency has had since the enactment of the IRS Restructuring and Reform Act of 1998 be studied in detail by a bipartisan panel. It also suggests that the notion of having professional managers head the agency, rather than tax professionals, decreased the sense of duty to the tax system that has been critical to the organization’s historically high ethical and cultural standards.

All Tax Analysts content is available through the LexisNexis® services.

September 25, 2013 in IRS News, IRS Scandal, Tax, Tax Analysts | Permalink | Comments (2)

Tuesday, September 24, 2013

Morse: Public Talk About Taxes in Australia and the U.S.

Tax Analysys Logo (2013) Susan C. Morse (Texas),  Public Talk About Public Finance In Australia and the United States, 71 Tax Notes Int'l 1213 (Sept. 23, 2013):

Susan C. Morse explains the differences in the public discourse about taxes in Australia and the United States.

All Tax Analysts content is available through the LexisNexis® services.

September 24, 2013 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Monday, September 23, 2013

Don't Die in Maryland or New Jersey

Tax Analysys Logo (2013) Diana Furchtgott-Roth (Director of Economics21 and Senior Fellow, Manhattan Institute),  Where Not to Die, 69 State Tax Notes 775 (Sept. 23, 2013):

Diana Furchtgott-Roth discusses prospects for estate tax reform at the federal and state levels and concludes the worst places to die are New Jersey and Maryland.

Table 2
Table 3

All Tax Analysts content is available through the LexisNexis® services.

September 23, 2013 in Scholarship, Tax, Tax Analysts | Permalink | Comments (3)

Saturday, September 21, 2013

The Tax Analysts Story

September 21, 2013 in Tax, Tax Analysts | Permalink | Comments (0)

Friday, September 13, 2013

Ordower: Preserving the Corporate Tax Base Through Tax Transparency

Tax Analysys Logo (2013)Henry Ordower (St. Louis), Preserving the Corporate Tax Base Through Tax Transparency, 71 Tax Notes Int'l 993 (Sept. 9, 2013):

Henry Ordower contends that the adoption of a wholly transparent corporate income tax could improve existing corporate tax systems worldwide and establish tax neutrality between entities that are subject to corporate income tax and those that are not.

All Tax Analysts content is available through the LexisNexis® services.

September 13, 2013 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Monday, September 9, 2013

Sullivan: Political Reality Blocks Radical Tax Reform in North Carolina

Tax Analysys Logo (2013)Martin A. Sullivan (Tax Analysts), Political Reality Blocks Radical Reform in North Carolina, 69 State Tax Notes 639 (Sept. 9, 2013):

Martin A. Sullivan writes that while politics may have changed the landscape of tax reform in North Carolina, the original, radical plan would never have survived.

Table 1

All Tax Analysts content is available through the LexisNexis® services.

September 9, 2013 in Scholarship, Tax, Tax Analysts | Permalink | Comments (1)

Saturday, September 7, 2013

The Tax Analysts Story

Tax Analysts Blog:  The Story of Tax Analysts, by Christopher Bergin

(Hat Tip: Joe Kristan.)

September 7, 2013 in Tax, Tax Analysts | Permalink | Comments (1)

Thursday, September 5, 2013

The Transfer Tax Trap -- It's Real

Tax Analysys Logo (2013)Maria P. Eberle & Hayes R. Holderness (both of McDermott Will & Emery, New York), The Transfer Tax Trap -- It's Real, 69 State Tax Notes 605 (Sept. 2, 2013):

Most states (and many localities) have some form of real property transfer tax (RPTT), which is generally imposed when the ownership of a piece of real property changes hands. However, not all RPTTs are created equally, and many taxpayers may find themselves with an unexpected tax bill if they don't pay close attention to each jurisdiction's rules. In our practice, we most often see RPTT issues arise in the context of corporate acquisitions, dispositions, mergers, and reorganizations -- including transactions that are generally regarded as "tax- free" because gains are exempt from income tax. This article provides an overview of the applicability of RPTTs to the most common types of transactions, and variations on those transactions, and offers insights into the numerous traps or opportunities that may exist. 

All Tax Analysts content is available through the LexisNexis® services.

September 5, 2013 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Wednesday, September 4, 2013

Sullivan: Brennan Study on Repatriation Tax Holiday Is Not a Game Changer

Tax Analysys Logo (2013)Martin A. Sullivan (Tax Analysts), New Insight on Repatriation Holiday Not a Game Changer, 140 Tax Notes 969 (Sept. 2, 2013):

The most common use of the $312 billion of funds repatriated under the provisions of the American Jobs Creation Act of 2004 was for cash acquisitions and not, as widely believed, distributions to shareholders. That is the finding of a new study by professor Thomas J. Brennan of Northwestern University Law School (Where the Money Really Went: A New Understanding of the AJCA Tax Holiday). [See also New York Times DealBook: A Holiday From Taxes, and Often From the Strings Attached, by Vic Fleischer (San Diego)] ...

For years it has been the accepted wisdom that most of the funds unlocked by the provisions of the Jobs Act were used for share repurchases and dividends. That conclusion is largely based on the research of economists Dhammika Dharmapala, Fritz Foley, and Kristin Forbes (Watch What I Do, Not What I Say: The Unintended Consequences of the Homeland Investment Act, Journal of Finance, 2011, p. 753). In their 2009 study, they estimated that between 60 and 92 percent of repatriated funds were used to make distributions to shareholders in 2005, mostly in the form of share repurchases. ... The main reason why their findings are important is that in most economic models, distributions to shareholders have little of the job-creating macroeconomic stimulus. Therefore, the results strongly suggest that the repatriation holiday failed to achieve its objective. To convince most economists that the funds had a significant effect on employment, the repatriated cash would have had to have been spent on direct hiring, worker training, capital spending, or research and development.

In his study, the first thing Brennan does is prove that the estimated 60 to 92 percent range is too high. ... Next, Brennan develops his own method of estimating the use of repatriated funds. ... Brennan estimates eight categories of uses of funds: cash acquisitions, share repurchases, dividends, research spending, capital expenditures, debt reduction, pension funding, and unexplained spending. (Brennan did not have data for spending on hiring or worker training.) As shown in Table 1, the leading use of repatriated funds was cash acquisitions (39 percent). Share repurchases were a distant second (27 percent). Research spending and capital spending account for only 4 percent and 3 percent, respectively. ...

Table 1

Under the Jobs Act, share repurchases and dividends were not permitted uses of funds. Acquisitions of firms, as long as their assets were primarily in the United States, were. Brennan's research shows that repatriating companies behaved more in the spirit of the law than previously thought. That may provide consolation in some quarters.  ... [N]either the Dharmapala nor the Brennan study indicates any significant increase in domestic capital spending or research. And that is not surprising given that we would expect to see this happen only if firms were cash- or credit-constrained. Most of the repatriated funds were brought home by large, financially secure U.S. firms that would have no trouble financing profitable domestic opportunities.

All Tax Analysts content is available through the LexisNexis® services.

September 4, 2013 in Scholarship, Tax, Tax Analysts | Permalink | Comments (1)

Tuesday, August 27, 2013

Dolan: The Foreign Tax Credit Diaries -- Litigation Run Amok

Tax Analysys Logo (2013)Kevin Dolan (Shearman & Sterling, Washington, D.C.; Former Associate Chief Counsel (International), IRS), The Foreign Tax Credit Diaries -- Litigation Run Amok, 71 Tax Notes Int'l 831 (Aug. 26, 2013):

In a pretend brief, Kevin Dolan explains to a pretend judge why the government's arguments regarding whether foreign taxes must be deducted in determining profit motive in Compaq Computer Corp. [277 F.3d 778 (5th Cir. 2001)] and IES Industries Inc. [253 F.3d 350 (8th Cir. 2001)] are incorrect.

All Tax Analysts content is available through the LexisNexis® services.

August 27, 2013 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0) | TrackBack (0)

Monday, August 26, 2013

Yin: Let's Get the Facts of the Couzens Investigation Right!

Tax Analysys Logo (2013)George K. Yin (Virginia), Let's Get the Facts of the Couzens Investigation Right!, 140 Tax Notes 950 (Aug. 26, 2013):

I am sympathetic to Jay Starkman's criticism of the practice since 1998 of appointing persons without tax experience to be IRS Commissioner [Practitioner Sees Need for Restructuring the IRS, 140 Tax Notes 837 (Aug. 19, 2013)]. Given the principal mission of the agency, it is plausible that an outstanding tax professional would be better situated to energize the workforce, instill the importance of integrity and professionalism, and provide more meaningful scrutiny of the agency's activities. We have had many examples of past Commissioners with tax backgrounds who have had those qualities. Such a person would also likely have longstanding relationships with wise colleagues familiar with the tax system that could be drawn upon when the inevitable challenging situations arise in the Commissioner's office. Arguably, the change carried out since 1998 has been exactly backwards. Rather than filling the Commissioner's slot and Oversight Board with business/"management" experts (and others with unclear qualifications), it may have been better to place Commissioner-quality tax professionals in all of those positions. Unfortunately, as Starkman notes, it appears that the shift away from tax experience in the management of the agency is going to continue.

Starkman errs, however, in repeating stale charges that the 1924-1926 Couzens investigation showed the agency to be "corrupt" and exposed a large scandal involving "plain graft." On completion of the long investigation, the chief counsel of the investigative committee testified before the Senate Finance Committee and Senator Couzens that the investigation had not uncovered corruption at the agency. To be sure, the investigation questioned many of the agency's decisions and administrative practices. There were also isolated instances of fraud which the agency had uncovered and revealed to the investigative committee at the start of its work. But the widespread allegations of corrupt practices, including favorable treatment of companies associated with Treasury Secretary Mellon, were not established.

All Tax Analysts content is available through the LexisNexis® services.

August 26, 2013 in Tax, Tax Analysts | Permalink | Comments (1) | TrackBack (0)

Tuesday, August 13, 2013

Christians: The Influence of Public Opinion on the Tax Practices of Starbucks and Other Multinational Companies

Tax Analysys Logo (2013)Allison Christians (McGill),  How Starbucks Lost Its Social License -- and Paid £20 Million to Get It Back, 71 Tax Notes Int'l 637 (Aug. 12, 2013):

Allison Christians examines how public opinion has come to bear on the tax practices of Starbucks and other multinational companies.

All Tax Analysts content is available through the LexisNexis® services.

August 13, 2013 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0) | TrackBack (0)