Paul L. Caron

Thursday, March 31, 2005

Bank & Cheffins Present Dividends and Politics Today at UCLA

Ucla_1Steven Bank (UCLA) & Brian Cheffins (University of Cambridge) present Dividends and Politics (with Marc Goergen (University of Sheffield)) today at UCLA as part of its Tax Policy and Public Finance Workshop series.  Here is the abstract:

Influential contributors to debates concerning corporate governance assert that it is impossible to understand key trends without taking politics into account. This proposition has, however, remained largely untested. This paper therefore offers an empirical study of the relation between politics and corporate governance, with the focus being on the determinants of dividend policy in publicly quoted United Kingdom (U.K.) companies between 1950 and the present. The departure point is the well-known partial adjustment model of dividend policy, which we augment to take into account the ideological orientation of the party in power and other potentially salient proxies for politics (e.g. tax policy and dividend controls). The model is tested by reference to aggregate annual data on earnings and dividends. The results indicate that the political placement of the party in office lacks explanatory power. Moreover, even when politics manifests itself in regulation explicitly designed to regulate corporate behaviour, political variables generally do not correlate in the predicted direction with dividend pay-outs. The evidence therefore is inconsistent with the proposition that politics shape corporate governance.

The workshop is from 3:00 - 5:00 pm PST in Room 2448 at UCLA.

March 31, 2005 in Colloquia | Permalink | TrackBack (0)

Hasen Presents The Illiberality of Human Endowment Taxation Today at NYU

Dhasen_1 Nyu_5David M. Hasen (Michigan) presents The Illiberality of Human Endowment Taxation today at NYU as part of its Colloquium on Tax Policy and Public Finance series. Here is part of the Introduction:

Recent tax scholarship has embraced the idea of personal endowment taxation, or taxation of human capabilities, as an approach to ideal tax theory. Under personal endowment taxation, individuals are taxed according to their native ability to command resources, rather than according to any actual index of goods or expenditures that might otherwise be thought relevant to imposing tax burdens, such as income, consumption, or wealth. The individual with a greater capacity to command resources will be taxed more heavily than the individual whose capacity is low, and in both cases tax assessed will be without regard to the income or wealth that persons actually earn or receive during their lifetimes....

The endowment ideal has enjoyed sustained and even expanding support across a wide spectrum of scholarlyapproaches to taxation....

This article challenges the normative coherence of these views as applied to liberal political theory. I argue that they are unpersuasive in light of widely accepted intuitions about the nature of democratic, liberal society, which may be summarized in the following formulation: If the point of the political order is to preserve autonomy, and if government derives its authority from the fact that it preserves autonomy, then any system of taxation that compromises autonomy, to the extent such a compromise is not necessary for the existence of the political order itself, is presumptively illegitimate. These intuitions find expression in the social contract theory that underwrites a much more limited role for the tax system than would be required under endowment taxation. I argue further that these intuitions are relevant to consequentialist views about endowment taxation as well. Although endowment taxation fits more comfortably within a consequentialist framework than within a liberal one, the same considerations that give pause for endowment taxation under liberalism call into question the attractiveness of consequentialism as a theoretical ideal.

The Colloquium will be held in Room 202 of Vanderbilt Hall from 4:00 - 6:00 p.m. EST. Although the public is invited to attend, due to heightened security throughout NYU Law, please contact Haydee Torres so she can provide the Guard's desk with your name.

March 31, 2005 in Colloquia | Permalink | TrackBack (0)

Staudt Presents Judging Statutes: Interpretive Regimes Today at University of Washington

Uw_logoStaudt_1 Nancy C. Staudt (Washington-St. Louis) presents Judging Statutes: Interpretive Regimes (forthcoming in the Loyola-L.A. Law Review) today at the University of Washington from 3:30 - 5:00 pm PST as part of its Distinguished Scholars Series Showcasing Prominent Tax Academics and Commentators.  Here is part of the abstract:

Theories of statutory interpretation abound. Scholars, judges, and commentators have long puzzled over the best method to locate the meaning of a statute and to this end have proposed a range of approaches that rely on various forms of evidence, including statutory text, legislative intent, agency interpretations, cultural norms, and judicial precedent. These theories do not merely offer competing modes of analysis; they also create competition among federal actors for control over the law-making process. An advocate of a textualist or intentionalist reading of a statute argues for bestowing special weight on the legislature, whether its product or its process. One who supports interpreting statutes with deference to administrative rulings privileges the executive over the judicial and legislative branches in the interpretive process. And those who defend reliance on substantive canons, precedent, or broad policy considerations in effect prioritize judge-made rules and perceptions. Championing one particular theory over others, therefore, means allocating power within the federal government and for this reason we refer to each particular mode of analysis—whether textualism, intentionalism, deference, precedent, and so on—as a component of larger interpretive regime: legislative, executive, or judicial.

In this essay we do not intend to defend an extant regime; many others have done that. Nor do not seek to develop a novel understanding of statutory interpretation; others have done that as well. Rather our goal is something more modest: to provide a descriptive mapping of statutory interpretation in the business context—specifically, in disputes over the meaning of the Internal Revenue Code. To that end we analyze every tax case decided by the Supreme Court since Congress adopted the modern tax laws in 1909 with an eye toward identifying the various rationales deployed by the justices, as well assessing some commonly held beliefs about regime use over time.

March 31, 2005 in Colloquia | Permalink | TrackBack (1)

Webcast and PowerPoint Presentations from Today's Meeting of the President's Tax Reform Panel

Tax_reform_panelA video webcast is available of today's meeting of the President's Advisory Panel on Federal Tax Reform at 9:30 a.m. PST in San Francisco.  The Panel also has released the testimony to be given at the meeting:

Panel 1:  Overview of International Tax Systems

Panel II: How Taxes Affect Business Decisions

  • PowerPoint Presentation of Paul Otellini (President and Chief Operating Office, Intel Corp.), Impact of Taxes on U.S. Semiconductor Company Decisions
  • PowerPoint Presentation of Robert Grady (Managing Director, The Carlyle Group and Member of the Board of Directors of the National Venture Capital Association)
  • Remarks by Milton Friedman (Nobel Laureate in Economics and Senior Fellow, Hoover Institute)

Panel III: Impact of Taxes on Savings, Investment, and Economic Growth

For the complete agenda, see here.

March 31, 2005 in Political News | Permalink | TrackBack (1)

IRS Grants Relief to Taxpayer Who Used TurboTax to Prepare His Tax Return

Tax_analysts_78In a not-yet published private letter ruling obtained by Tax Analysts, the IRS granted relief to a taxpayer who claims he overlooked a tax election worth over $70,000 because he used TurboTax software to prepare his return:

In the March 22 ruling provided to Tax Analysts by the taxpayer's enrolled agent, the IRS considered and granted a request to make a late election to treat capital gains as investment income under § 163(d)(1) and 163(d)(4)(B).  By making the election, the taxpayer will be able to deduct otherwise disallowed investment interest expense. The IRS determined that when the taxpayer filed his return he did not understand that the option to make the election existed or would affect his liability.

According to Claudia Hill, president of Tax Mam Inc., the enrolled agent representing the taxpayer in filing the private letter ruling request, the taxpayer prepared his 2002 joint return using TurboTax....

A spokesperson for Intuit, the maker of TurboTax, defended the popular software. "I suspect any claim that TurboTax did not alert a customer to the availability of the election is not accurate" said Bob Meighan, vice president of customer advocacy for Intuit. "TurboTax definitely alerts customers to the election option and fully explains the implications. This is a clear case of a customer improperly using the software or at least using it in a manner which will not provide the guidance and tips one would expect from software."....

TurboTax provides two methods for entering data. The first option, recommended by Intuit, is the interview method, which prompts a user to enter data in response to specific questions that vary depending on the user's prior responses. The other option is a forms- based method to enter the data, which allows a user to enter information directly on the tax forms. According to Meighan, using the forms-based method to prepare a return bypasses the guidance and tips that TurboTax provides in the interview process. He characterized the process as similar to pulling out the tax forms and putting in the numbers manually, and then allowing TurboTax to simply do the calculations. When following the forms-based method, a TurboTax user does not receive guidance or analysis, said Meighan. "You are basically on your own . . . you do not have any of the guidance that TurboTax is all about," he said. "If you're going to drive at night without the lights on . . . then you take the risk you may not arrive at the correct destination," Meighan added....

TurboTax currently offers a "100% guaranteed accurate calculations" policy, which according to Meighan would extend to calculation errors resulting in an overpayment. The policy provides for reimbursement of any IRS or state penalties imposed because of TurboTax calculation errors, according to Intuit's Web site. Since a return prepared without making the investment income election would still be correct, it is unclear whether the policy benefits a taxpayer who overpays tax due to missed elections. In any case, "there are no penalties or interest when the government owes you $70,000," said Hill.

See the documents available on the Tax Analysts web site:

March 31, 2005 in IRS News, Tax Analysts | Permalink | TrackBack (1)

President's Tax Reform Panel Holds Its Sixth Meeting Today in San Francisco

Tax_reform_panelThe President's Advisory Panel on Federal Tax Reform holds its sixth meeting today at 9:30 a.m. PST in San Francisco:

  • Welcome by the Panel Chairman

Panel 1:  Overview of International Tax Systems

  • Willard Taylor (Sullivan & Cromwell, New York, NY)
  • Mihir Desai (Rock Center for Entrepreneurship Associate Professor, Harvard Business School)
  • Jeffrey Owens (Director, OECD Center on Tax Policy and Administration)
  • Larry Langdon (Mayer, Brown, Rowe & Maw, Chicago, IL; Former Commissioner, Internal Revenue Service Large & Mid-Size Business Division)

Panel II: How Taxes Affect Business Decisions

  • Paul Otellini (President and Chief Operating Office, Intel Corp.)
  • Robert Grady (Managing Director, The Carlyle Group and Member of the Board of Directors of the National Venture Capital Association)
  • Milton Friedman (Nobel Laureate in Economics and Senior Fellow, Hoover Institute)

Panel III: Impact of Taxes on Savings, Investment, and Economic Growth

  • Michael Boskin (Tully M. Friedman Professor of Economics and Senior Fellow, Stanford University and Hoover Institute)
  • Alan Auerbach (Robert D. Burch Professor of Economics and Law, University of California, Berkeley)

The meeting will be held at the Fort Mason Center, Landmark Building A, San Francisco, CA 94123-1382.  For the complete agenda, see here.

March 31, 2005 in Political News | Permalink | TrackBack (0)

Loyola-Chicago Seeks Tax Visitor for Spring 2006

LoyolalogoLoyola University Chicago School of Law is seeking a visiting tax professor for the Spring 2006 semester.  The visitor's responsibilities would include teaching a combined course in Corporate & Partnership Tax. Interested candidates should e-mail a letter and resume to Professor Spencer Webber Waller, Chair of Visiting and Lateral Appointments Committee, here.

March 31, 2005 in Tax Profs | Permalink | TrackBack (0)

Tax Court Sides with IRS in § 2036 Retained Interest Case

Tax_court_2 In Estate of Bigelow v. Commissioner, T.C. Memo. 2005-65, the Tax Court yesterday found for the Government in a § 2036 retained interest case:

[D]ecedent and her children had an implied agreement that decedent could continue during her lifetime to enjoy the economic benefits of, and retain the right to the income from, the [] property after she conveyed the property to the partnership, and that the transfer was not a bona fide sale for adequate and full consideration. Thus, the value of the [] property is included in decedent’s gross estate.

March 31, 2005 in New Cases | Permalink | TrackBack (0)

Wednesday, March 30, 2005

UCLA Holds Forum Today on The Social Security Safety Net -- Will it Hold?

Ucla_1The UCLA Globalization and Labor Standards Speaker Series, the Institute of Industrial Relations, and the Program on Tax Policy are sponsoring a forum today on The Social Security Safety Net -- Will it Hold?

Welcoming Remarks: Michael Schill (UCLA Law School Dean)

Moderator: Katherine Stone (UCLA Law School)


  • Michael Dukakis (Visiting Professor of Public Policy, UCLA School of Public Affairs)
  • Sebastian Edwards (Henry Ford II Chair in International Management, UCLA Anderson Graduate School of Management and Department of Economics)
  • Daniel J.B. Mitchell (Ho-su Wu Professor, UCLA Anderson Graduate School of Management and School of Public Affairs)
  • Kirk J. Stark (UCLA Law School)
  • Eric Zolt (UCLA Law School)

The forum will be held at 4:30 - 6:15 p.m. PST in Room 1447, UCLA Law School

March 30, 2005 in Tax Conferences | Permalink | TrackBack (0)

Rosenbloom Presents Angels on a Pin: Arm's Length in the World Today at Michigan

Michigan_1Rosenbloomh David Rosenbloom (NYU) presents Angels on a Pin: Arm's Length in the World today at Michigan as part of its Tax Policy Workshop Series.  Here is the concluding paragraph:

The foregoing comments are not meant as a repudiation of arm’s length. Rather, they are meant to raise a question: what does this apparently simple concept mean? As a method for dealing with transactions between commonly controlled persons, arm’s length suffers from serious flaws not only of a practical nature but in theory, concept, and methodology. Given the potential that arm’s length holds for controversy, resourceconsumption, and cost, it is hard to believe that its quirks and defects will remain so little discussed for much longer — or that a renewed and more forthright scrutiny of arm’s length in light of any and all conceivable alternatives will be much longer in coming.

March 30, 2005 in Colloquia | Permalink | TrackBack (0)

US News Tax Rankings

Here are the US News tax rankings to be publicly released on Friday:

  • 1.  NYU
  • 2.  Florida
  • 3.  Georgetown
  • 4.  Northwestern
  • 5.  Harvard
  • 5.  Miami
  • 7.  Boston University
  • 7.  UCLA
  • 9.  Texas
  • 9.  Yale
  • 11.  Stanford
  • 12.  San Diego
  • 13.  Michigan
  • 14.  Virginia
  • 15.  Hastings
  • 16.  Duke
  • 16.  Loyola-L.A.
  • 18.  Villanova
  • 19.  Boston College
  • 19.  SMU
  • 19.  Chicago
  • 19.  University of Washington
  • 23.  Emory
  • 24.  George Washington
  • 24.  Denver

Graduate Tax Programs

  • 1.  NYU (1 in 2004)
  • 2.  Florida (2)
  • 3.  Georgetown (3)
  • 4.  Northwestern (4)
  • 5.  Miami (5)
  • 6.  Boston University (6)
  • 7.  San Diego (6)
  • 8.  Loyola-L.A. (9)
  • 9.  Villanova (10)
  • 10.  SMU (10)
  • 10.  University of Washington (8)
  • 12.  Denver (10)

Biggest Winners (2005 v. 2004)

  • + 4:  Boston University (7 in 2005, 11 in 2004)
  • + 4:  Villanova (18, 22)
  • + 3:  Boston College (19, 22)
  • + 3:  Miami (5, 8)
  • + 3:  SMU (19, 22)
  • + 2:  Hastings (15, 17)
  • + 2:  Northwestern (4, 6)
  • + 2:  UCLA (7, 9)
  • + 2:  Virginia (14, 16)

Biggest Winners (2005 v. 2004 v. 2003)

  • Northwestern (4 in 2005, 6 in 2004, unranked in 2003)
  • UCLA (7, 9, 25)
  • Duke (16, 17, unranked)
  • Loyola-L.A. (16, 17, unranked)
  • Boston University (7, 11, 16)

Biggest Losers (2005 v. 2004)

  • Columbia (unranked in 2005, 20 in 2004)
  • UC-Berkeley (unranked, 21)
  • - 6:  Chicago (19, 13)
  • - 5:  University of Washington (19, 14)
  • - 4:  Texas (9, 5)
  • - 4:  Stanford (11, 7)
  • - 2:  Denver (24, 22)

March 30, 2005 in Tax Profs | Permalink | TrackBack (0)

ABA Tax Section Offers Teleconference & Webcast Today on Buy-Sell AGreements for LLCs and S Corporations

Aba_tax_12The ABA Tax Section offers a telconference and webcast today on Buy-Sell Agreements for LLCs and S Corporations as part of its "Last Wednesday" CLE series from 1:00–2:30 p.m. EST:

Buy-sell agreements among co-owners or present and future owners of a closely-held business are intended to ensure the smooth future transition of its ownership. They provide the mechanism and the means to effect a change in control and a transfer of interests when certain events occur including death, disability and retirement. However, there is widespread confusion among legal professionals on the questions of whether and how to fund these agreements, even though, without such funding, they may contain what some may refer to as empty, unenforceable promises. Consequently, most existing agreements need periodic revision and improvement.


    • Ronald A. Levitt (Walston, Wells, Anderson & Bains, Birmingham, AL (moderator))
    • Thomas J. Nichols (Meissner Tierney Fisher & Nichols, Milwaukee, WI)
    • James P. Dalle Pazze (Herdeg, du Pont & Dalle Pazze, Wilmington, DE)

March 30, 2005 in ABA Tax Section, Tax Conferences | Permalink | TrackBack (0)

Tax Prof Moves, 2005-06

Entry Level Hires

  • Allison Christians (Wisconsin)
  • Michael Hatfield (Texas Tech)
  • Andrea Monroe (Temple)
  • Shari Motro (Richmond)
  • Miranda Perry (Colorado)
  • Kerry Ryan (St. Louis)

Promotions and Tenures

  • Terrence Chorvat (George Mason) from Associate Professor to Associate Professor (with tenure)
  • John Eason (Tulane) from Associate Professor to Professor (with tenure)
  • Jeffrey Kahn (Santa Clara) from Assistant Professor to Associate Professor (with tenure)
  • Joni Larson (Thomas Cooley) from Assistant Professor to Associate Professor
  • Stuart Lazar (Thomas Cooley) from Assistant Professor to Associate Professor
  • Gregg Polsky (Minnesota) from Associate Professor to Associate Professor (with tenure)
  • Donald Tobin (Ohio State) from Assistant Professor to Associate Professor (with tenure)

Lateral Moves

  • Rich Lavoie (Northwestern) to Akron
  • Leandra Lederman (George Mason) to Indiana-Bloomington as William M. Oliver Professor of Tax Law
  • Diane Ring (Florida) to Boston College


  • Alice Abreu (Temple) to Harvard (Spring 2006)
  • Carter Bishop (Suffolk) to San Diego (Summer 2005)
  • David Brennen (Mercer) to Georgia (Fall 2005)
  • Sam Donaldson (University of Washington) to Northwestern (Fall 2005)
  • Deborah Geier (Cleveland State) to Washington University (Spring 2006)
  • Wendy Gerzog (Baltimore) to New England (Fall 2005 & Spring 2006)
  • Jeffrey Kahn (Santa Clara) to North Carolina (Fall 2005)
  • Mitchell Kane (Virginia) to Pennsylvania (Spring 2006)
  • Jeffrey Kwall (Loyola-Chicago) to Northwestern (Spring 2006)
  • Theodore Seto (Loyola-L.A.) to Cornell (Fall 2005)


  • Arthur Andrews (Arizona)

March 30, 2005 in Tax Profs | Permalink | TrackBack (0)

Gerzog on QTIP Income Interests and Intent

Gerzog_1 Tax_analysts_76 Wendy C. Gerzog (Baltimore) has published Davis and Whiting: QTIP Income Interests and Intent, 106 Tax Notes 1597 (Mar. 28, 2005), also available on the Tax Analysts web site as Doc 2005-5289, 2005 TNT 59-39:

In the first "Estate and Gift Rap" column, Prof. Wendy C. Gerzog looks at intent, QTIP elections, and two recent cases. 


March 30, 2005 in Scholarship, Tax Analysts | Permalink | TrackBack (0)

NY Court of Appeals Upholds Tax on Non-Resident Telecommuter

Back in September, we blogged the unsuccessful attempt by Cardozo Tax Prof Edward Zelinsky to avoid paying New York state income tax on the portion of his salary attributable to his work in his Connecticut home office.  In January, we blogged the oral argument in the New York Court of Appeals in Matter of Huckaby v. New York State Division of Tax Appeals, in which the taxpayer Huckaby tried to distinguish his case from Zelinsky's:

Huckaby, however, raises different issues, which Peter L. Faber of McDermott, Will & Emery in Manhattan hopes will yield a different result. Unlike Zelinsky, Huckaby is a telecommuter. Also unlike Zelinsky, Huckaby's principal place of business is outside of New York -- so far outside New York that he rarely and only indirectly benefits from government services in the state. Huckaby lives approximately 900 miles from Manhattan.

"Mr. Huckaby's case presents the plight of a nonresident telecommuter," Faber argues in his brief. "Telecommuting did not exist when the regulation at issue first appeared on the scene, but it is widespread now." Faber contends that the convenience of the employer test, as applied to Huckaby, is in violation of the equal protection and due processes clauses of the U.S. Constitution and contrary to "common sense."

The New York Court of Appeals yesterday in a 4-3 decision rejected Huckaby's argument:

The issue here is to what extent the salary paid by a New York employer to a resident of another state who works most of his time outside, and beyond commuting distance from, New York is subject to New York State income tax. The majority holds that 100% of the employee's income is taxable in New York, so long as (1) any significant part of the employee's work is performed in New York, and (2) the employer does not require the employee to work outside New York.

For media accounts of the decision, see here and here. (Thanks to reader Ben Cunningham for the tip.)

March 30, 2005 in New Cases | Permalink | TrackBack (0)

Tuesday, March 29, 2005

Buchanan and Fried Join Blogosphere

New_blogs_1 A hearty welcome to Tax Profs Neil H. Buchanan (Rutgers-Newark) and Barbara H. Fried (Stanford), who have joined the Left2Right blog:

We're a bunch of academics, mostly philosophers but also some lawyers, political scientists, and economists. We're interested in liberal ideas, though we are probably far from unanimous about what "liberal" means, and our being interested in liberal ideas doesn't entail that each of us subscribes to all of them. We think that political debate in this country has deteriorated into a shouting match, a food fight, a flame war -- call it what you will. We'd like to consider whether liberal ideas should be somehow reconsidered -- in some respects revised, in others perhaps merely re-stated -- with the aim of increasing the overall ratio of dialog to diatribe in the American political forum. Some of us will be trying out various ways of re-thinking and re-formulating those ideas; others may end up arguing that such attempts are unnecessary, even counter-productive. And in the course of our discussion, there will be plenty of digressions and asides of the sort that naturally occur at the margins of a group discussion.

Check out Neil's inaugural post on social security here.

March 29, 2005 in Tax Profs | Permalink | TrackBack (0)

News Story on Vacation Home Rules

Interesting Associated Press story: Vacation Home Sale Taxes More Complicated. Here is the opening:

The tax implications of selling your second home deserve a second look.

Many are cashing in on the rising value of the real estate market, particularly for vacation homes. Sales of second homes surged in 2004, according to a recent study from the National Association of Realtors, with second-home sales hitting a record 2.82 million last year, up 16.3 percent from 2.42 million 2003. Investment properties and vacation homes now account for more than one-third of residential deals.

But, if you're selling the beach house, the tax treatment can be more complicated than the sale of your main house. Factors like how much time you've spent in the second home or whether you rented it to others can make the difference between making a sale worthwhile or taking a bath on taxes.

March 29, 2005 in News | Permalink | TrackBack (0)

Tax Foundation Releases Analysis of Colorado's Taxpayer Bill of Rights

Tax_foundation_logo_2The Tax Foundation today released An Analysis of Misleading Attacks on Colorado's Taxpayer Bill of Rights.  Here is the opening: 


The state of Colorado is under assault. Opponents of Colorado’s Taxpayer Bill of Rights (TABOR) are waging a well coordinated but misleading attack on Colorado’s reputation. This attack takes the form of a number of rankings and statistics that purport to show that the Taxpayer Bill of Rights has decimated Colorado. These rankings and statistics are based on the assumption that if Colorado ranks poorly on things like the adequacy of prenatal care and education spending, then Colorado is failing to adequately care for and educate its citizens, and that the Taxpayer Bill of Rights must be to blame. A closer look at the attacks shows that they fail to prove that the amount a state spends on health care and education determines quality, and they also fail to tell the whole truth about the rankings and statistics of the state of Colorado.

March 29, 2005 in Think Tank Reports | Permalink | TrackBack (0)

SSRN Rankings of Tax Faculty

Ssrn_logo_11It is the season of law school rankings. U.S. News & World Report will publish its annual rankings on Friday (we offered an early peek yesterday here).  Our symposium on The Next Generation of Law School Rankings will be held at Indiana-Bloomington on April 15.  And last week, SSRN unveiled a new feature that ranks 200 American and international law school faculties and 1,000 American law professors by (among other things) the number of downloads of their papers from the SSRN data base. I will have much more to say on this blog about the SSRN rankings shortly as Bernie Black (Texas), the Managing Director of SSRN, and I are writing an article for the Indiana symposium on the uses and limits of SSRN in measuring scholarly performance.

In the meantime, I thought it would be interesting for readers of this blog to see the list of the Top 25 Tax Faculty in two of the SSRN categories: all-time downloads and new downloads (within the past 12 months):

                                                  SSRN Rankings of Top 25 Tax Faculty

All-Time Downloads

Recent Downloads

Tax Faculty (School)

Tax Rank

Overall Rank

Tax Rank

Overall Rank

Louis Kaplow (Harvard)





David Schizer (Columbia)





David Walker (Boston University)





Edward McCaffery (USC)





David Weisbach (Chicago)





Steven Bank (UCLA)





Victor Fleischer (UCLA)





Paul Caron (Cincinnati)





Reuven Avi-Yonah (Michigan)





Daniel Shaviro (NYU)





Terrence Chorvat (Geo. Mason)





Sam Thompson (UCLA)





Elizabeth Garrett (USC)





Barbara Fried (Stanford)





Richard Kaplan (Illinois)





William Bradford (Princeton-NYU)





Calvin Johnson (Texas)





Kyle Logue (Michigan)





Jeff Strnad (Stanford)





Michael Asimow (UCLA)





Joseph Bankman (Stanford)





Theodore Seto (Loyola-L.A.)





Leandra Lederman (Indiana)





William Klein (UCLA)





Herwig Schlunk (Vanderbilt)





Anthony Infanti (Pittsburgh)





Kirk Stark (UCLA)





Jim Repetti (Boston College)





Michael Knoll (Pennsylvania)





Linda Sugin (Fordham)





Note that this ranking includes tax professors with at least one tax paper on SSRN, and all papers (including non-tax papers) by these tax professors are included in the SSRN data.

The other SSRN ranking categories are:

These rankings, of course, are imperfect measures of faculty scholarly performance -- as are the existing ranking methodologies of reputation surveys, productivity counts, and citation counts. Our modest claim in the Indiana symposium piece is that the SSRN data can play a role in faculty rankings along with these other measures.

March 29, 2005 in Scholarship, Tax Profs | Permalink | TrackBack (2)

Sheppard on More Bugs in the Repatriation Statute

Tax_analysts_75Lee A. Sheppard has published More Bugs in the Repatriation Statute, also available on the Tax Analysts web site as Doc 2005-6163, 2005 TNT 59-2:

In a news analysis, Lee Sheppard examines the interaction of the new section 965 dividend repatriation scheme and the subpart F rules in mergers and acquisitions cases.

March 29, 2005 in Scholarship, Tax Analysts | Permalink | TrackBack (0)

Infanti Op-Ed on A Different Kind of Tax Reform

Infantia_1Anthony C. Infanti (Pittsburgh) has published an op-ed on Jurist, A Different Kind of Tax Reform:

There is a good chance that fundamental tax reform of a kind neither envisioned nor desired by Congress or the President may occur over the next four years, initiated by one or more of the same-sex couples who were married in Massachusetts in 2004. 


March 29, 2005 in Scholarship | Permalink | TrackBack (0)

Monday, March 28, 2005

Early Release of 2006 U.S. News Law School Rankings

The U.S. News & World Report Law School Rankings are due to be officially released on Friday, but the folks at the Volokh Conspiracy have posted a link to the Top 100.

March 28, 2005 in News | Permalink | TrackBack (0)

Philadelphia Drops Most Charges in Mylotte Tax Suit

We previously blogged (here) press reports that the city of Philadelphia's lawsuit against the Mylotte, David & Fitzpatrick law firm for $2.3 million in back taxes, interest, and penalties. reports that the city has dropped all but three partners as defendants in the lawsuit.  (Thanks to reader Steven Sholk for the tip.)

March 28, 2005 in New Cases | Permalink | TrackBack (0)

Infanti on Tax Protest, "A Homosexual," and Frivolity

Infantia_1Anthony C. Infanti (Pittsburgh) has published Tax Protest, "A Homosexual," and Frivolity: A Deconstructionist Meditation, 24 St. Louis U. Pub. L. Rev. 21 (2005).  Here is the abstract:

In this contribution to a symposium entitled Out of the Closet and Into the Light: The Legal Issues of Sexual Orientation, I recount and then ponder the story of Robert Mueller. Mueller, a gay man, spent more than a decade protesting the discriminatory treatment of gays and lesbians under the Internal Revenue Code. As a result of his tax protest, Mueller was jailed for more than a year, and then was twice pursued by the IRS for taxes and penalties. In pondering Mueller's story, I consider it both as a telling example of the forcible closeting of gay and lesbian issues in tax and as a signpost pointing in the direction of the next front in the battle for gay rights.

March 28, 2005 in Scholarship | Permalink | TrackBack (0)

IRS May Consider eBay Sales Taxable Income

Interesting Associated Press story: IRS May Consider eBay Sales Taxable Income.  Here is the opening:

Hawking baby and children's clothes - along with some garage sale and thrift store bargains - on eBay helps Sunni Wojnarowsky bring in some extra money so she can afford to stay home with her two young boys. The additional dollars are great, but does she really need to hassle with the paperwork and report her small profit to the Internal Revenue Service? Her question, posed to the online auction site's discussion board for sellers, generated much advice - and more confusion.

In tax law, there is no clear, bright line that separates fun from profit, or a hobby from a business. But IRS instructions make it clear that all income - a category that includes bribes, gambling winnings, kickbacks and money made in illegal activities - can be taxed. "You can't get an answer from anybody," Wojnarowsky said in an interview from her home in Brunswick, Ohio. "It would be nice to have a straightforward answer of yes, you file taxes, or no, you don't."

March 28, 2005 in News, Teaching | Permalink | TrackBack (1)

Tax Opinion Standards from 100% to 0%

Tax_analysts_73Tax Analysts has published a funny Anonymous Guide to Tax Opinion Standards, 106 Tax Notes 1469 (Mar. 21, 2005) (also available on the Tax Analysts web site as Doc 2005-5011, 2005 TNT 54-25), which details the opinion language to be used for each percentage chance of success from 100% down to 0%.  Some of my favorites:

                                   Tax Opinion Standards

Chance of Success

Standard of Opinion




Will at the Ivory Soap level


I would tell my mother-in-law to do this


More likely than not


Your guess is as good as mine


Less likely than not


If we get the right judge


As taxpayer’s counsel, I would not be ashamed to argue this in court


It could be that it might work


I’ve seen worse


Maybe Enron would do this


You have got to be joking


Anything can happen, but this won’t


You must not understand the legislation


Canadian jails aren’t bad



March 28, 2005 in Scholarship, Tax Analysts | Permalink | TrackBack (1)

Boise on Playing with "Monopoly Money": Phony Profits, Fraud Penalties and Equity

Boise_sm_1 Ssrn_logo_12 Craig M. Boise (Case Western) has posted Playing with "Monopoly Money": Phony Profits, Fraud Penalties and Equity (forthcoming in the Minnesota Law Review) on SSRN.  Here is the abstract:

Although most U.S. corporations don't pay federal income taxes, during the last several years some corporations have been willing to report, and pay over to the Treasury, hundreds of millions of dollars in taxes that they didn't owe to conceal the fact that they were playing with Monopoly money fabricating profits as phony as the pastel colored money used in the classic Parker Brothers board game. Of course, when the game was over, those same companies wanted to raid the community chest to get their tax money back. But is it fair to refund taxes in such circumstances?

It turns out that tax refund suits are in essence claims in equity. This means that claimants are subject to well-established equitable defenses like the doctrine of unclean hands and equitable estoppel. The article concludes that given the potentially corrosive effects of tax fraud on the U.S. tax system, the assertion of equitable defenses to earnings inflation-related refund claims is necessary to provide a more effective penalty regime than the current statutory system. In reaching this conclusion, the article necessarily traverses several areas of the law, including corporate fraud, the history and development of equity and equitable principles, the rules versus standards debate, law and economics, risk management, optimal penalty theory and even a bit of tax policy. The subject matter is timely and likely to continue to be relevant as policymakers explore responses to corporate wrongdoing.

March 28, 2005 in Scholarship | Permalink | TrackBack (0)

Tax Foundation Issues Report Critical of Montana Lawsuit Seeking Disclosure of Corporate Tax Returns

The Tax Foundation has issued a Fiscal Facts report critical of a lawsuit filed by a Montana state senator to force the Montana Department of Revenue to disclose corporate tax returns for those corporations with over $1 million in Montana sales: Montana Corporate Tax Disclosure Lawsuit is Built on Shaky Foundations:

Government should respect the privacy of corporate tax records. Any lawsuit seeking disclosure of private records should have compelling reasons. Senator Elliott’s lawsuit rests on four shaky foundations that ultimately collapse when scrutinized:

    1. Actual data on corporate tax collections in Montana indicate that the corporate license tax is healthy.
    2. Lawmakers do not need access to private taxpayer information to make sound tax policy.
    3. A corporation’s sales in a state do not necessarily translate into taxable income.
    4. Senator Elliott’s analysis does not take into account the vast number of deductions, credits and exemptions that Montana corporate taxpayers can legitimately claim, all of which reduce corporate tax payments to the state.

March 28, 2005 in Think Tank Reports | Permalink | TrackBack (0)

Sunday, March 27, 2005

Top 5 Tax Paper Downloads

SSRN LogoThis week's list of the Top 5 Tax Paper Downloads on SSRN is the same as last week's list: 

1.  Tax Shelters and Corporate Debt Policy, by John R. Graham (Duke, Fuqua School of Business) & Alan L. Tucker (Pace, Lubin School of Business)

2.  Tax and the Philosopher's Stone, by Kevin A. Kordana (Virginia) & David Tabachnick (Virginia, Fellow in Philosophy Department)

3.  Comparative Income Taxation: A Structural Analysis, by Hugh J. Ault (Boston College) & Brian J. Arnold (Goodmans LLP, Toronto)

4.  Enslaving the Beachcomber: Some Thoughts on the Liberty Objections to Endowment Taxation, by Kirk J. Stark (UCLA)

5. Rethinking the Perpetual Nature of Conservation Easements, by Nancy A. McLaughlin (Utah)

March 27, 2005 in Top 5 Downloads | Permalink | TrackBack (0)

Raby & Raby on Business Purpose, Bona Fide Sale, and Family Limited Partnerships

Tax_analysts_72 Burgess J.W. Raby & William L. Raby have published Business Purpose, Bona Fide Sale, and Family Limited Partnerships, also available on the Tax Analysts web site as Doc 2005-5964, 2005 TNT 56-33.  Here is the Introduction:

In Business Purpose and Economic Substance in FLPs, Tax Notes, Jan. 1, 2001, p. 85, we wrote that while a family limited partnership (FLP) without a business purpose "may be ignored by the IRS for income tax purposes, . . . that lack of business purpose will not prevent an FLP from being given effect for transfer tax purposes and thus producing valuation discounts." That comment was based on Estate of Albert Strangi v. Commissioner, 115 T.C. 478 (2000). The first Strangi decision was hardly clear-cut, including an opinion, a concurring opinion, and three dissenting opinions. Now the Tax Court has compounded the confusion with another family limited partnership opinion, Estate of Wayne C. Bongard v. Commissioner, 124 T.C. No. 8 (2005), in which the majority concludes -- contrary to Strangi I -- that for estate tax purposes, there must be a legitimate and significant nontax reason for creating the family limited partnership. In addition to a majority opinion, the Bongard case had three other opinions -- one judge who concurred with only the result and not the reasoning (joined by another judge) and two judges who each wrote their own separate opinions concurring in part but dissenting in part, with still two other judges agreeing with one of those latter separate opinions.

March 27, 2005 in Scholarship, Tax Analysts | Permalink | TrackBack (1)

Downloading Other People's Tax Returns on the Internet

1040 Michelle Malkin has some very scary news for folks who prepare their own taxes on TurboTax, TaxCut, or other software who also share songs and movies on the Internet via person-to-person "P2P" programs like Kazaa or LimeWire:  if you are not careful about the folders on your computer you make available for file-swapping, your tax return ill be avaiable for the world to see.  Don't believe it?  Type in "Form 1040" on Kazaa or LimeWire and see what you get -- check out these three examples here (click on 1, 2, and 3).  (Thanks to the Tax Guru and Roth & Company for the tip.)

March 27, 2005 in News | Permalink | TrackBack (0)

Saturday, March 26, 2005

Spotlight_2Mary L. Heen (Richmond)

      • B.A. 1971, Yale
      • M.A.T. 1972, Harvard
      • J.D. 1978, University of California-Berkeley
      • LL.M. (Taxation) 1987, NYU   


HeenMary Heen is Professor of Law at the University of Richmond, where she has taught since 1992. She received her LL.M. in Taxation at NYU the year after Congress enacted the Tax Reform Act of 1986, and then practiced law for three years with Patterson, Belknap, Webb & Tyler in New York City.

When offered a stint as an acting assistant professor in the graduate tax program, she took a leave of absence from the firm: “NYU was a terrific place to begin as a taxprof rookie” Mary says, “with generous mentors for teaching and scholarship-in-progress as well as regular lunchtime conversation and pizza around the corner in the Village.” Mary served as assistant editor of the Tax Law Review, working closely with a team of graduate student editors and editor-in-chief Deborah Schenk. At NYU she taught timing issues under the income tax and tax policy in the graduate tax program and basic federal income tax in the J.D. program.

At Richmond, Mary regularly teaches federal income taxation, corporate taxation, legislation, and a tax policy seminar. In addition, she has co-taught feminist legal theory. She received a university-wide teaching award in 1998: “Students come to their first class burdened with a certain amount of tax dread, and some of them are surprised when they discover that tax law illuminates broader public policy issues.”

“I took a very indirect path to tax. Although I loved Jack McNulty’s tax class at Boalt, and later returned to tax, a first amendment seminar with Anthony Lewis and a course on sex discrimination with Herma Hill Kay ignited an interest in civil liberties/civil rights law. My experience as an advocate both before and after law school made me see tax within a broader public law framework.”

After a federal district court clerkship, Mary moved to New York for a one-year fellowship in the American Civil Liberties Union’s national office, which has principal responsibility for litigation before the U.S. Supreme Court. She argued and briefed cases before the Court and “had the rare opportunity to work beside some outstanding Supreme Court advocates, including legal directors Bruce Ennis and Burt Neuborne (who began his career as a tax lawyer).” She stayed five more years as staff counsel for ACLU’s Women’s Rights Project. Mary served as trial counsel for a national class of flight attendants in a pregnancy discrimination suit and represented women professors in several pension discrimination cases: “As a result of successful litigation against TIAA-CREF, some of my taxprof colleagues will receive higher benefits at retirement.”

Mary writes on tax and social policy issues, including how tax provisions relate to child care and welfare-to-work policies. Recently, she has argued for greater transparency and accountability in the tax legislative process.

She’s served on AAUP’s Committee on Academic Freedom and Tenure since 2003, and has been a member since the mid-‘90s of the editorial advisory board for the Community Tax Law Project’s Community Tax Law Report.

Mary’s spouse and two teenagers sometimes rope her into mountain climbing and backpacking expeditions: “Others in my family share Blake’s view: ‘Great things are done when men (sic) and mountains meet;/This is not done by jostling in the street.’ Closer at hand, we’ve all enjoyed the James, a beautiful river running through Richmond, with a launching spot for kayaks and canoes just a five-minute drive from the law school.”

Each Saturday, TaxProf Blog shines the spotlight on one of the 700+ tax professors in America's law schools. We hope to help bring the many individual stories of scholarly achievements, teaching innovations, public service, and career moves within the tax professorate to the attention of the broader tax community. Please email me suggestions for future Tax Prof Profiles. For prior Tax Prof Profiles, see here.

March 26, 2005 in Tax Prof Spotlight | Permalink | TrackBack (0)

Jones on A Simple Regulation for Partnership Mergers and Mixing Bowls

Jonesd Tax_analysts_72 Darryll K. Jones (Pittsburgh) has published A Simple Regulation for Partnership Mergers and Mixing Bowls, 106 Tax Notes 1453 (Mar. 21, 2005), also available on the Tax Analysts web site as Doc 2005-4368, 2005 TNT 54-30.  Here is the preamble to his proposed regulation:

The only time a partner should enjoy nonrecognition after the realization of appreciation is on the capitalization of the partnership. Investment should never be a taxable event to the extent it requires postponed personal consumption other than the investment itself. A contribution of appreciated property is a realization event -- the partner's capital account is increased by the full value of property, not just its basis, and because we want to encourage investment -- that is, postponed consumption -- we should also postpone recognition of the realized, but stored and unconsumed, gain. A merger is a continuing investment so the principle should apply in that context. The particular advantage to the contributing partner is justified by the general benefit to society. There is, however, no further advantage to be gained by granting another nonrecognition opportunity. When the appreciated property is consumed, taxation is appropriate and indeed necessary. Accordingly, when the partnership sells or exchanges the property, whether obtained on initial or continuing capitalization, the gain should be recognized and then only by the contributing partner because she is the one to whom the consumption benefit inures, as proven by the credit to her capital account. It is the contributing partner who selfishly consumed the appreciation and she alone should pay the tax.

March 26, 2005 in Scholarship, Tax Analysts | Permalink | TrackBack (0)

SBE Council Publishes Tax Cut Permanency Report #1: Capital Gains

The Small Business & Entrepreneurship Council has published Tax Cut Permanency Report #1: The Capital Gains Tax.  Here is the Conclusion:

Are capital gains taxes the only policy issue impacting investment, entrepreneurship and the economy? Obviously not. However, capital gains tax rates do matter a great deal. Our elected officials did the right thing in cutting the capital gains tax in 1997, and again in 2003. Now to secure the greatest potential benefits from this tax relief, the 2003 capital gains tax cut must be made permanent, and the sooner the better.

March 26, 2005 in Think Tank Reports | Permalink | TrackBack (0)

Friday, March 25, 2005

Gallanis on Inheritance Rights for Domestic Partners

GallanisThomas P. Gallanis (Washington & Lee) has published Inheritance Rights for Domestic Partners, 79 Tul. L. Rev. 55 (2004). Here is the abstract:

This Article emerges from the aftermath of the terrorist attacks on September 11. The loss of nearly three thousand lives prompted understandable calls for compensation to be paid to each victim's surviving family. Yet who would count as "family"? The administrator of the federal government's compensation fund, Kenneth R. Feinberg, announced in December 2001 that he would look to state inheritance law to answer this question. It was at this point that many lawyers and lawmakers realized what specialists in probate had long known: state inheritance laws provide strong protection for a decedent's surviving spouse but little or none for a decedent's surviving same- or opposite-sex domestic partner.

The ABA's Section on Individual Rights and Responsibilities asked the ABA's Section on Real Property, Probate and Trust Law to examine whether and how inheritance rights might be extended to domestic partners. In turn, the Real Property, Probate and Trust Law section referred the question to the Joint Editorial Board for Uniform Trust and Estate Acts (JEB). In December 2002, the JEB appointed me as a special reporter to prepare a study including, if possible, a model statute. The study and statute were prepared and, at the JEB's November 2003 and February 2004 meetings, discussed. A concern was raised about whether the JEB would have the authority to approve statutory language or even to circulate such language for broader consideration; put conversely, whether the JEB would be acting ultra vires. At the February 2004 meeting, it was concluded that such activity would be beyond the JEB's authority. However, there was substantial agreement that, with issues of domestic partnership much in the news, state legislatures and legal scholars would be keen to see and could benefit from the study and model statute that had been prepared. I am therefore publishing the study in a law review. I wish to emphasize that I am acting purely in my individual capacity, not as a special reporter to the JEB.

This Article is divided into four parts. Part I provides social and demographic background on domestic partnerships within the United States. Part II examines the extent to which state inheritance law currently provides protections for domestic partners. Part III discusses the recent decision by the American Law Institute to provide rights for domestic partners in situations akin to divorce. Part IV contains a proposal for inheritance-law reform, including a model statute and accompanying commentary.

March 25, 2005 in Scholarship | Permalink | Comments (0) | TrackBack (0)

Book on Collection Due Process

Book_1Leslie Book (Villanova) has published CDP and Collections: Perceptions and Misperceptions, 7 Commun. Tax L. Rep. 1 (Fall/Winter 2004).  Here is the abstract:

In this essay, Professor Book reveals the gulf between perceptions and reality in tax collection determinations. For example, the essay faults the modern IRS practice of over-emphasizing centralized decision-making, with its belief that almost all collection policies should be categorized as inventory management. The essay suggests how that approach contributes to (i) risk of erroneous government actions and (ii) decreased taxpayer satisfaction with IRS decisions. Mindful, however, that collection determinations involve millions of agency decisions, many of which do not benefit from additional adversarial procedural protections, the essay suggests that policy makers should calibrate procedural protections by balancing various factors, including the private interest at stake, the risk of depriving that interest through the procedures used, as well as the probable value of additional safeguards, and the government’s interest.

The essay also critiques the recent Tax Court case of Robinette v. Commissioner, and the Tax Court’s application of the abuse of discretion standard to tax collection determinations. Arguing that allowing parties to introduce evidence in judicial appeals of collection determinations is inconsistent with administrative law jurisprudence, the essay reveals that Robinette ultimately places taxpayer interests at risk by deemphasizing systemic incentives. Robinette provides cover for a judicial usurping of agency functions, which may provide the means to correct for error in individual cases, but will not create additional judicial pressure to improve agency practice. The essay suggests that as a matter of policy and law, the Tax Court should identify CDP cases involving collection determinations as informal adjudications, subject to the Administrative Procedure Act (APA).

To obtain a copy of the article, email here.

March 25, 2005 in Scholarship | Permalink | TrackBack (0)

Crawford on One Flesh, Two Taxpayers: A New Approach to Marriage and Wealth Transfer Taxation

CrawfordBridget J. Crawford (Pace) has published One Flesh, Two Taxpayers: A New Approach to Marriage and Wealth Transfer Taxation, 6 Fla. Tax Rev. 757 (2004).  Here is the Conclusion:

The one flesh, two taxpayer system implicates two ongoing political debates. At the same time that voters, legislators, and courts in every state consider the legal and moral validity of same-sex marriage, national leaders contest the importance of estate tax repeal. The current tax treatment of marital wealth transfers frequently diverges from the underlying economic substance of property transfers. Treating husband and wife -- or any two taxpayers -- as a single economic unit is inconsistent with the privileges and responsibilities of citizenship as they have evolved over time. The one flesh, two taxpayer system proposes an increase in the applicable exclusion amount so that any taxpayer, regardless of marital status, can transfer up to $10 million tax-free. The new rule will shrink the administrative costs associated with estate and gift tax assessment and collection, overall tax revenue will increase, and the tax burden will be shifted more effectively to those who are most able to pay.

Former Commissioner of the Internal Revenue Service Sheldon Cohen famously said that "[i]f you know the position a person takes on taxes, you can tell their whole philosophy. The tax code, once you get to know it, embodies all the essence of life: greed, politics, power, goodness, charity. Everything's in there." The one flesh, two taxpayer proposal is no exception. Its greatest hope is a wealth transfer tax system that is just, simple and progressive.

March 25, 2005 in Scholarship | Permalink | TrackBack (0)

Caron Presents Taking Back the Law School Classroom: Using Technology to Foster Active Student Learning Today at Northern Kentucky

I am presenting Taking Back the Law School Classroom: Using Technology to Foster Active Student Learning, 54 J. Legal Educ. 551 (2004), today at noon at Northern Kentucky.  Here is the abstract of the article (co-written with Rafael Gely):

Law schools (and indeed all of higher education) have witnessed an explosive growth in the use of technology in the classroom. Many law professors now deploy a wide array of technological bells and whistles, including PowerPoint slides, web-based course platforms, in-class Internet access, and the like. Students, in turn, increasingly come to class armed with laptop computers to harvest the fruits of the classroom experience. Yet in recent years there has been somewhat of a backlash, with various law professors arguing that this technology is interfering with, rather than improving, pedagogy in the classroom. According to the critics, this technology increases student passivity and thus interferes with the active learning that should be the hallmark of a law school classroom. In addition, the critics complain that laptops provide too much competition for the students' attention, enticing them to play computer games or DVDs and, with in-class Internet access, to read and send email (or instant messages), shop on-line, or check out the latest political, financial, or sports news. This Article opens a new chapter in this debate, explaining how law professors can use both old and new technologies to increase student engagement in the classroom.

We first lay out the pedagogical case for creating an active learning environment in the law school classroom and then examine the critics' charge that technology impedes these goals. The Article offers a competing vision of how technology can be harnessed to increase active student learning and, in the process, empower students to resist their laptop's siren song. In particular, we describe how in our tax and labor law courses we combine both old (substituting word processing text for PowerPoint slides) and new (using handheld wireless transmitters) technologies to inject more active learning into the classroom.

I previously presented the paper at Boston College, Florida State, San Diego, and the Future of Law Libraries Symposium  For New York Time coverage of this classroom technology, see here, here, here, and here.

March 25, 2005 in Colloquia | Permalink | TrackBack (0)

Blanchard on Zero Basis in the Taxpayer's Own Stock or Debt Obligations

Tax_analysts_logo_28 Jerred G. Blanchard, Jr. (Ernst & Young) has published Zero Basis in the Taxpayer's Own Stock or Debt Obligations: Do Those Instruments Constitute "Property"?, 106 Tax Notes 1431 (Mar. 21, 2005), also available on the Tax Analysts web site as Doc 2005-3451, 2005 TNT 54-27. Here is the Introduction:

This report was inspired by a recent article written by Prof. Stuart Lazar [previously blogged on TaxProf Blog here] addressing the deceptively complex tax issues arising from the contribution by a taxpayer of its own debt obligation to a transferee corporation in an exchange that satisfies the requirements of § 351. The Lazar article should be mandatory reading for any tax practitioner faced with the prospect of a client wishing to engage in a § 351 exchange, not just because it is a clearly written discussion of the various tax issues that must be considered in that context, but primarily because it raises the bar for future policy deliberations regarding the kinds of items that should constitute "property" for purposes of § 351 as well as other nonrecognition provisions found in subchapter C.

Prof. Lazar has made a significant and quite welcome advance in the analysis of the proper characterization of transfers of a stock or debt "liability" of a transferor to a transferee corporation in an exchange otherwise qualifying for nonrecognition treatment under subchapter C. The Lazar article contains valuable insights into the various weaknesses in the current analysis by the Service and the courts, as set forth in Rev. Rul. 68-629, the Tax Court's decision in Alderman, the Second Circuit's decision in Lessinger, and the Ninth Circuit's decision in Peracchi. Prof. Lazar also provides a useful way out of the muddled quicksand in which, thanks to the existing authorities, taxpayers currently are mired.

Part II of this report is a summary of the current state of affairs and offers a few observations on that unhappy state. Part III summarizes Prof. Lazar's viable solution to the problem, offering a few additional observations and concluding remarks.

March 25, 2005 in Scholarship, Tax Analysts | Permalink | TrackBack (0)

Desai & Dharmapala on Corporate Tax Avoidance and Firm Value

Ssrn_logo_10Mihir A. Desai (Harvard Business School) & Dhammika Dharmapala (University of Connecticut, Economics) have posted Corporate Tax Avoidance and Firm Value on SSRN. Here is the abstract:

How do investors value managerial actions designed solely to minimize corporate tax obligations? Using a framework in which managers' tax sheltering decisions are related to their ability to divert value, this paper predicts that the effect of tax avoidance on firm value should vary systematically with the strength of firm governance institutions. The empirical results indicate that the average effect of tax avoidance on firm value is not significantly different from zero; however, the effect is positive for well-governed firms as predicted. Coefficient estimates are consistent with an expected life of five years for the devices that generate these tax savings for well-governed firms. Alternative explanations for the dependence of the valuation of the tax avoidance measure on firm governance do not appear to be consistent with the empirical results. The findings indicate that the simple view of corporate tax avoidance as a transfer of resources from the state to shareholders is incomplete, given the agency problems characterizing shareholder-manager relations.

March 25, 2005 in Scholarship | Permalink | TrackBack (0)

The Tax Man Always Rings Twice

Funny piece by David Huang, The Tax Man Always Rings Twice, on In Loco Veritas. Here is the opening:

I wish I could say that I became a tax attorney because of my love for numbers and clear cut rules, but the truth of the matter is that I became a tax lawyer for the same reason that musicians join bands – for the chicks. As you all know, women go wild over a single tax attorney with an adjusted gross income of $148,238, no dependents and a record of no audits. In fact, upon seeing my tax return on a blind date, a few women have become so love struck that they became physically ill. They must have known right then that they were no match for a true tax player.

However, that’s fine with me, because it just leaves more room for the rest of the honeys. And with tax season rolling around, I’m like that old woman in the show. I’ve got so many women, I don’t know what to do.

Just last week, I was parking in the garage of my fully depreciable condo when I was approached by one of my neighbors, Cindy. “Excuse me,” she said, “You wouldn’t happen to be a tax lawyer, would you?” I wonder what gave me away – my personalized license plate – TAXPLAYA?

When I confirmed that I was a tax lawyer, I could see the look of lust already forming in her eyes. Of course, after practicing for three years, I’ve become accustomed to this type of reaction, so I played it cool. “And how may I help you?” I asked, giving her that “Come to Poppa” look they teach in the LLM programs.

Thanks to Ann Murphy (Gonzaga) for the tip.

March 25, 2005 in News | Permalink | TrackBack (1)

Thursday, March 24, 2005

IRS & States Reap Benefits of Son of Boss Settlement Program

Irs_logo_74 The IRS made two announcements in connection with the Son of Boss tax shelter settlement program:

IR-2005-37: Taxpayers participating in the Son of Boss tax shelter settlement have so far paid in more than $3.2 billion, a figure that should top $3.5 billion when the project concludes in coming months.

FS-2005-13: As part of a larger partnership between the IRS and state tax agencies, states are beginning to see early results from the Son of Boss settlement initiative.

  • Many taxpayers who participated in the Son of Boss initiative also amended their state tax returns. Arizona, Illinois, Maine, Maryland, Michigan, New York, Ohio, Utah and Virginia are among the states benefiting from the initiative and have collected more than $23.5 million from voluntary state tax return amendments.
  • In addition, the IRS information shared with the states has initially resulted in $161 million in disallowed losses claimed and assessments of nearly $16 million in taxes, interest and penalties for Colorado, Connecticut, Maine, Maryland, Missouri, North Dakota, Pennsylvania, Utah and Virginia combined. More states are expected to show significant benefits as the initiative progresses.
  • Separately, a number of states have also pursued Son of Boss participants through their own state compliance initiatives. The California Franchise Tax Board through its voluntary compliance initiative has collected $132 million to date from Son of Boss participants, while the New York State Department of Taxation and Finance has collected approximately $45 million through a similar program.
  • To date, information from 1,015 cases has been shared with 34 states.

March 24, 2005 in IRS News | Permalink | TrackBack (0)

DOJ Ramps Up Tax Prosecutions with April 15 Approaching

BNA Tax Advisory Board Meets on Estates, Gifts & Trusts Today in New York City

The BNA Tax Management Advisory Board meets today at 5:30 pm EST (followed by a reception at 7:00 pm) at the Waldorf-Astoria Hotel in New York City to discuss three papers on Estates, Gifts and Trusts:

  • Mistakes in Appraisal Reports and Testimony (and How To Learn From Them), by L. Paul Hood, Jr. (L. Paul Hood, Jr., APLC, Mandeville, LA)
  • The Reciprocal Trust Doctrine, by Paul E. Van Horn III (McLaughlin & Stern, New York, NY)
  • The Emergence of the Private Benefit Doctrine as a Wild Card, by Thomas J. Schenkelberg (Polsinelli Shalton Welte Suelthaus, Kansas City, MO)

March 24, 2005 in Tax Conferences | Permalink | TrackBack (0)

Bank Presents A Capital Lock-In Theory of the Corporate Income Tax Today at NYU

Nyu_5Bank_6 Steven A. Bank (UCLA) presents A Capital Lock-In Theory of the Corporate Income Tax today at NYU as part of its Colloquium on Tax Policy and Public Finance series. Here is the Conclusion:

This Article breaks new ground in the search for a justification for the corporate income tax. In prior efforts, commentators have either negated the existence of a justification separate from that of the individual income tax by emphasizing its role as an aid to the collection of tax from shareholders or they have portrayed the tax as an antibusiness measure to be imposed against the corporation as a form of cost or regulation. Under capital lock-in theory, the corporate tax can be portrayed in a more positive light. Effectively, the corporate income tax serves as a political buffer for the corporation's ability to lock-in capital. By severing the corporation from the rates applicable to individuals, we enable Congress to sharply increase individual marginal rates during times of crisis while keeping corporate rates at a more moderate level. At the same time, however, by maintaining a separate levy on corporations that can rise in fall with the need for capital lock-in, we avoid indefinite deferral of revenues from corporate income. The real virtue of the corporate tax may be the flexibility it provides to respond to changing circumstances without tearing down the corporate enterprise.

The Colloquium will be held in Room 202 of Vanderbilt Hall from 4:00 - 6:00 p.m. EST. Although the public is invited to attend, due to heightened security throughout NYU Law, please contact Haydee Torres so she can provide the Guard's desk with your name.

March 24, 2005 in Colloquia | Permalink | TrackBack (0)

Sullivan on Treasury's Five Options for Tax Reform

Tax_analysts_71 Martin Sullivan has published Treasury's Five Options for Tax Reform, 106 Tax Notes 1353 (Mar. 21, 2005), also available on the Tax Analysts web site as Doc 2005-5567, 2005 TNT 55-4:

Martin Sullivan explains how a 2002 Treasury Department memo provides unique insight into the future construction of President Bush's tax reform plan.

March 24, 2005 in Scholarship, Tax Analysts | Permalink | TrackBack (0)

Tax Policy Center Hosts Forum Today on Graetz & Shapiro's Death by a Thousand Cuts: An Analysis of the Estate Tax's Demise

The Tax Policy Center hosts a forum today on Death by a Thousand Cuts: An Analysis of the Estate Tax's Demise as part of its Perspectives on Tax Reform Series:

In 2001, Congress enacted legislation to phase out the estate tax by 2010. The repeal is effective for only one year, however. The estate tax--referred to by some as the "death tax"--directly affects the wealthiest 2% of the population and represents a progressive source of federal revenue and a key incentive for charitable giving. Prior to 2001, the movement to repeal the tax was a primary focus of reform debates, but its elimination seemed highly unlikely. How, then, did the legislation suddenly sail through Congress? And how did so many Americans become opposed to a tax that would never affect them?

Inherited_wealth_1At this Brookings/TPC briefing, Yale professors Michael J. Graetz and Ian Shapiro will discuss the history of the estate tax and analyze the reform movement through the philosophical arguments that framed it and the interests that drove it. They are the authors of a new book, Death by a Thousand Cuts (Princeton University Press, 2005), that is based on extensive interviews conducted with the relevant policymakers and political players. Following their presentation, a panel will discuss those findings and offer insights into the broader implications of the tax reform debate. 



  • Michael J. Graetz, Justus S. Hotchkiss Professor of Law, Yale University
  • Ian Shapiro, William R. Kenan, Jr. Professor of Political Science, Yale University

Moderator: William G. Gale, Co-Director, Urban-Brookings Tax Policy Center, Senior Fellow and Deputy Director, Economic Studies, Brookings Institution


  • Leonard E. Burman, Co-Director, Urban-Brookings Tax Policy Center, Senior Fellow, Urban Institute
  • Bill Frenzel, Guest Scholar, Governance Studies, Brookings Institution
  • Thomas E. Mann, Senior Fellow, Governance Studies, Brookings Institution

The forum will be held at 9:30 - 11:00 am EST, Falk Auditorium, The Brookings Institution, 1775 Massachusetts Ave., NW, Washington, DC.  To RSVP, e-mail here

March 24, 2005 in Tax Conferences | Permalink | TrackBack (0)

Student Comment on Tax Treatment of Patent Donations

The Harvard Journal of Law and Technology has published an interesting student comment, Tax Treatment of Patent Donations in a Post-JOBS Act World, 18 Harv. J.L. & Tech. 295 (2004).  Here is the Introduction:

On October 22, 2004, President Bush signed into law the American Jobs Creation Act of 2004 ("the Act"). Section 882 of the Act overhauls the tax treatment of charitable donations of patents, significantly reducing the amount a donor is able to deduct. Although the measure removes the primary financial incentive for making such donations, the provision is a necessary measure to realign the practice of patent donation with tax and innovation policy goals.

This Comment will begin with an overview and history of the patent donation industry. It will then describe the administrative difficulties in using fair market value as the value of the donation. Next, the Comment will address measures taken by the IRS earlier in 2004 in response to those difficulties. It will then describe the Act itself. The Comment concludes with a discussion of the broader impact of reducing the deduction.

March 24, 2005 in Scholarship | Permalink | TrackBack (0)

Wednesday, March 23, 2005

Gordon Presents Tax Structures in Developing Countries Today at Michigan

Gordon_1 Michigan_1Roger Gordon (UC-San Diego, Economics Dep't) presents Tax Structures in Developing Countries: Many Puzzles and a Possible Explanation (with Wei Li (University of Virginia, Darden School of Business) today at Michigan as part of its Tax Policy Workshop Series.  Here is the part of the Conclusion:

The key hypothesis of this paper is that governments need to rely on the information available from bank records in order to identify taxable entities and to measure the amount of their taxable activity. Use of banks then makes firms subject to the tax law. When tax rates are high enough, firms instead may forego the economic benefits from use of banks in order to avoid these taxes.

This threat of disintermediation may be of little import in the richest countries, where the value provided by financial intermediation is considerable. In poorer countries, however, this threat of disintermediation may be a key factor both limiting the government’s ability to collect tax revenue and shaping government policy more generally.

March 23, 2005 in Colloquia | Permalink | TrackBack (0)