Paul L. Caron
Dean




Thursday, July 14, 2022

Today's Law, Society, And Taxation Panels

L&S
Today's Law, Society, and Taxation panels at the 2022 Law & Society Association Annual Meeting:

Session #4:  International Tax I (Lotta Björklund Larsen (Exeter; Google Scholar), Chair/Discussant):
While there is no imposition of tax at the supranational level, the imposition of tax at the national level within a country's own borders introduces complexity at the international level that affects issues of tax policy and tax design. The papers on this panel consider many of these complex concerns, with special attention paid, in some of the papers to the way the United States has addressed matters of international taxation.

Leonel Pessôa (FGV Direito SP; Google Scholar) & Melina Rocha (York), The Impact of Reduced Rates in VAT: An Empirical Analysis of Indirect Taxes in Brazil:

Tax non-compliance in many countries poses a threat to government to collect a sufficient amount of tax revenue (World Bank, 2021). A common example of tax evasion occurs where the shopper is forced to pay cash and not being issued with a receipt.

A number of countries (such as Portugal) implemented a tax lottery system in an attempt to improve tax compliance (Burger & Schoeman, 2021). Shoppers are incentivised to ask suppliers for receipts on their purchases made to ensure that sales are not underreported, as an audit trail is then created (Fabbri & Hemels, 2013). This receipt is then entered into a lottery where prizes are awarded on a regular basis.

A limited number of studies have been performed on implementing tax lottery systems and measuring the effectiveness thereof (Bazart & Pickhardt, 2011; Brockmann, Genschel & Seelkopf, 2016; Fabbri, 2015; Fabbri & Hemels, 2013; Marchese, 2009; Ungureanu & Dascalu, 2015). Empirical evidence indicates that tax lottery systems are effective in increasing tax compliance and thus increasing tax revenue received (Fabbri, 2015). The only evidence obtained from a South African perspective from a limited sample is that they are mostly positive about a reward for tax compliance (Bornman & Stack, 2015).

The main research question is: Would SA shoppers support a tax lottery system?

The broad research objectives are thus to determine: whether shoppers would support a tax lottery system; whether people’s choice of suppliers would change due to the tax lottery system, the type of prizes winners of the tax lottery system would like to win; and if the winners would like to be made known publicly.

I want to conduct a survey to find out from South African citizens if they would, inter alia, support a tax lottery system. The target population is the economically active citizens as well as the elderly citizens also consuming products and services, thus around 41 million citizens. The target sample size is therefore around 2500 respondents.

Yvette Lind (Copenhagen; Google Scholar), (Tax) Citizen of the World:

This study is premised on the idea that international tax competition, in combination with prior financial crises and the ongoing erosion of domestic tax bases, has led to a development where individual countries are intentionally designing their legal systems to attract affluent taxpayers who are mobile by choice, such as high-skilled workers, high-net value- and high-income individuals while deterring poorer individuals, most often those who are forced to move, for instance, asylum seekers and immigrants. Mobile taxpayers who are considered desirable are awarded a more beneficial tax treatment and greater inclusion in society while those who are considered undesirable are subject to harsher tax treatment compared to the former group, as they are taxed equally to citizens, yet without receiving the same rights and benefits as citizens.

Existing scholarship provide an incomplete account of the dynamics, implications, and effects of the four described cross-cutting dimensions (citizenship combined with taxation, taxpayer protection and democratic inclusion) as it touches isolated aspects of them and, therefore, consider fragments of the situation for these transnational taxpayers. This study attempts to provide a coherent understanding of the four cross-cutting dimensions through applying an interdisciplinary approach rooted in legal theory.

Session #5:  Tax Evasion (Luisa Scarcella (Antwerp), Chair/Discussant):
The evasion of properly imposed tax laws introduces a variety of questions regarding what is the proper response to those who flaunt the law. In addition, when taxpayers are faced with decisions about compliance or noncompliance, the equity and transparency of the law in question likely influences their thinking in this. realm. The papers on this panel consider a variety of questions related to the interaction between tax and crime, and how best to think about how to implement the tax law.

Jeesoo Nam (USC; Google Scholar), Just Taxation of Crime:

The tax law treats criminals differently from non-criminals. Should it? Under the public policy doctrine, various tax deductions are disallowed if they are closely tied to criminal activity. Running a criminal enterprise is thus tax disadvantaged compared to running a non-criminal enterprise.

This Article considers a variety of possible explanations. (1) The tax disadvantage provides an incentive not to commit crime. (2) The tax disadvantage helps to bring deserved punishment to the criminal. (3) Criminals have given up their right not to be taxed. (4) Criminals have taken an unfair advantage and so must be stripped of that unfair advantage. (5) Taxpayers deserve to bear the full cost of their criminal activities with no help from others.

This Article argues in favor of (5) as the best explanation. Since taxpayers deserve to bear the full cost of their criminal activities, the public policy doctrine should be expanded to prohibit all deductions tied to criminal wrongdoing rather than just the ones which are currently prohibited.

Victoria Gronwald (LSE), Interest Group Framing of Tax Transparency Regulation in Switzerland and the UK: A Qualitative and Quantitative Analysis of Consultation Submissions on Laws concerning Exchange of Financial Account Information and Beneficial Ownership Registers:

This research situates itself in an increased interest in wealth inequalities (Piketty 2016, 2019), which are perpetuated to an important extent by offshore financial centres (OFCs). These jurisdictions can be used by wealthy individuals to hide their money through secret bank accounts or anonymous companies, out of reach of tax authorities or law enforcement agencies. The capital outflows particularly harm countries in the Global South and reinforce unequal power imbalances between developed and developing countries.

The international community has undertaken efforts to curb tax evasion and other financial crime through OFCs. Apart from high-net-worth individuals it is mainly the wider financial sector and wealth management professionals who have been affected by transparency laws. We however know very little about how they have reacted to and perhaps tried to shape the regulations in their own and their clients’ favour. This research aims to shed light onto this issue by analysing interest groups’ interaction with the laws from a framing theory perspective (Boräng et al. 2014; de Brucker 2017). It thereby contributes to literature about interest group influence on international tax law (Büttner & Thiemann 2017; Christensen 2020; Latulippe 2018; Ring 2010).

The paper analyses how interest groups frame issues around tax transparency regulation in the top two wealth management countries in the world, Switzerland and the United Kingdom. This with a view to draw conclusions about the private sector’s influence on the policy process and perhaps on the limited effectiveness of regulation. The research is applying quantitative text analysis and computer-assisted qualitative content analysis to previously unexplored interest group submissions to public consultations. It takes a comprehensive approach, covering all consultations on laws related to financial account and company ownership transparency in the two case study countries over a time period of around 20 years.

Hilary Escajeda (Mississippi College; Google Scholar), Capitalizing on Polanyi's Paradox: Human Tax Professionals v. AI Technologies:

In the decades ahead, “machine intelligence” will radically transform the tax profession. Powered by artificial intelligence (AI) technologies and fueled by colossal amounts of data, these synthetic intellects—which include the AI subfields of machine learning, deep learning, neural networks, and natural language processing—will reshape the range and scope of work historically performed by humans. For example, these synthetic intellects will increasingly complete common analysis and client functions presently performed by tax professionals.

The challenge presented for new and mid-career tax practitioners is to develop, strengthen, and leverage our unique and valuable human knowledge and skills. These human capacities are needed to solve the broad, deep, and complex non-routine tax problems that extend beyond the narrow, shallow, and simple routine competencies of AI.

This Article explores emerging opportunities for tax professionals in light of AI’s increasing ability to perform standard analyses. To ground this discussion, this Article opens with a primer on these increasingly capable cognitive technologies. Next, it surveys the tax analysis capabilities of Blue J Legal’s machine learning and AI platform. It then examines British-Hungarian philosopher Michael Polanyi’s theory of human knowledge—and his paradox. Briefly, Polanyi posits that “we know more than we can tell .” As a result, humans’ unique ability to integrate tacit and explicit human knowledge cannot be easily broken down into discrete tasks that can be routinized, computerized, and ultimately “AI-ized.” It then offers some practical strategies for tax professionals to augment their cognitive capacities and technical skills so that they can race with—instead of against—the machines.

Caroline Bruckner (American; Google Scholar), The Small Business Tax Literacy Project: A Pathway to Better Compliance:

At an April 2021, Senate hearing, IRS Comm'r Retting made headlines when he estimated that the tax gap—the difference between taxes that are owed and amounts actually paid and collected—could be as high as $1 trillion . Existing data shows that small businesses and self-employed taxpayers are major tax gap contributors. Tax gap estimates for 2011-2013 show that of the total $352 billion underreporting identified, $110 billion was attributable to individuals failing to report all of their business income, and another $45 billion was attributable to taxpayers failing to correctly report their self-employment taxes. Several factors contribute to small businesses’ failure to comply with their tax obligations. For many taxpayers with self-employment income, the lack of information reporting is particularly problematic. To tackle the growing tax gap, the Biden Administration has announced a new tax compliance agenda that includes increasing IRS resources to upgrade its workforce and technology, along with new information reporting for peer-to-peer payment processors (e.g., VENMO) to give the IRS more visibility to the business income from high-income business owners that IRS claims goes unreported. In addition, pursuant to the Taxpayer First Act of 2019, the IRS has resolved to improve information distribution using new technology, applying behavioral insights, expanding its social media outreach strategy. While extensive work has been done on taxpayer compliance, significantly less has been done on the overall tax literacy of small businesses, particularly women business owners. This article considers new and existing survey data to gauge the tax literacy of small business taxpayers to measure noncompliance. Also, in building on the collaborative IRS/SBA work done pursuant to COVID-19 recovery legislation, this paper outlines a new IRS tax literacy outreach strategy targeted to small business owners by leveraging the SBA’s existing program infrastructure.

Session #6:  Global Taxation (Brett Freudenberg (Griffith; Google Scholar), Chair/Discussant):
International taxation poses unique challenges, as a variety of independently operating taxing authorities seek to coordinate their systems in an attempt to prevent tax avoidance and evasion at the global level. Sharing insights into these challenges from various international perspectives allows for additional insight into how these challenges manifest themselves in various arenas. The papers on these panels explore some of the complicated issues that arise in the world of cross border taxation.

Young Ran (Christine) Kim (Cardozo; Google Scholar), Tax Harmony: The Promise and Pitfalls of the Global Minimum Tax (with Reuven S. Avi-Yonah (Michigan; Google Scholar)):

The rise of globalization has become a double-edged sword for countries seeking to implement a beneficial tax policy. On one hand, there are increased opportunities for attracting foreign capital and the benefits that increased jobs and tax revenue brings to a society. However, there is also much more tax competition among countries to attract foreign capital and investment. As tax competition has grown, effective corporate tax rates have continued to be cut, creating a “race-to-the-bottom” issue.

In 2021, 136 countries forming the OECD Inclusive Framework passed a major milestone in reforming international tax by successfully introducing the framework of a global minimum corporate tax, known as Pillar Two. It aims to set a floor for corporate tax rates with various corrective measures so that multinational enterprises’ income will be taxed once in either source country or residence country at a substantive tax rate. Hence, Pillar Two is the first implementation of the “single tax principle” at the global level. Because Pillar Two requires an unprecedented amount of coordination among countries, it is important to understand Pillar Two sufficiently so countries can maneuver the challenges of implementation, while still enjoying the ultimate benefit that would come from this global tax harmony.

This Article analyzes the issues of tax competition and why the majority of jurisdictions in the world have come to the conclusion that a global minimum tax is needed. This Article explains the single tax principle as theoretical underpinning of Pillar Two, breaks down the principles and policies that comprise Pillar Two, and anticipates what promise and pitfalls passage of the global minimum tax will bring. Because the basis of Pillar Two is a direct extension of the GILTI and BEAT provisions of the TCJA, it is reasonable to anticipate that the global minimum tax will be considered a success if it is implemented by all of the G20 countries.

Michael Littlewood (Auckland; Google Scholar), The OECD as a Lawmaker: The Instructive Case of New Zealand:

The New Zealand government has been a wholehearted supporter of the BEPS project from its inception in 2012 and in 2018 and 2019 it effected a slew of amendments to the country’s income tax legislation to give effect to most of the OECD’s recommendations. Several of these amendments refer expressly to documents produced by the OECD: the Hybrids Mismatch Report, the Branch Mismatch Report, the Transfer Pricing Guidelines and the Commentary on the OECD’s Model Tax Convention. Consequently, these documents, or, at least, some sections of them, are now part of New Zealand law.

This may well have been a sensible approach to dealing with the complex problem of cross-border tax avoidance by large enterprises, but it is novel and its appropriateness is not self-evident. The first aim of this article, therefore, is to examine its likely efficacy, as a matter of tax law reform. Moreover, whereas most of the legislation’s references to OECD materials are static (referring to documents published at a specified time), one of them is ambulatory – that is, the reference is to the document as amended from time to time by the OECD. Thus, the New Zealand Parliament seems in effect to have authorised the OECD to change New Zealand law by amending the document. Again, this might be a good idea, but for Parliament to have delegated legislative power to a body over which it has no control whatever seems to be jurisprudentially and constitutionally novel. The second aim of the article, therefore, is to examine this aspect of the amendments.

Graziela Ares (Coimbra), Is the “Letter and Spirit” of Law the Right Battle to Fight in Corporate Taxation?:

The growing tax-motivated internationalization did not pass unnoticed by civil society and governments in the last decades. The use of the letter and the neglect of the spirit of the law to allow aggressive tax planning are the prominent critics made to multinational companies. Opponents blame profitable companies, which pay low in taxes by using complex corporate and contracting structures, as well as willing governments, who offer a legal shield to attract business despite their lack of economic or operational reasons of location. On the other hand, defenders plead that the taxes paid are correct and compliant with the law. In between, a few initiatives of the European Commission and OECD illustrate how international organizations are trying to equalize the interests with standard procedures, cooperation, and investigations to avoid abuses. This research investigates if the letter and the spirit of law argument, by trusting individual agents' discernment to make fair and ethical decisions in taxation, can resolve stakeholders' discontentedness. The empirical analysis of four high-profile cases - Starbucks, Ikea, McDonald’s, and Apple - has indicated that legal tax structures may lead to controversial results and has revealed how laws may worsen the situation by not including tax events of new business models. After identifying the sources of aggressive tax strategies, it is possible to look at how international organizations are defending the spirit of the tax law. The challenges imposed by tax avoidance are innumerous and this inquire demonstrates that the debate around the spirit of the law does not improve the collective result of taxation. Multilateralism has been proved not to be enough to resolve the conflicts, but it may be, with some improvements in the letter of laws, the best chances for governments to resolve the matter.

Hans Gribnau (Tilburg) & Sonja Dusarduijn (Tilburg), Principles-Based Tax Drafting And Friends: On Rules, Standards, Fictions And Legal Principles:

The growing tax-motivated internationalization did not pass unnoticed by civil society and governments in the last decades. The use of the letter and the neglect of the spirit of the law to allow aggressive tax planning are the prominent critics made to multinational companies. Opponents blame profitable companies, which pay low in taxes by using complex corporate and contracting structures, as well as willing governments, who offer a legal shield to attract business despite their lack of economic or operational reasons of location. On the other hand, defenders plead that the taxes paid are correct and compliant with the law. In between, a few initiatives of the European Commission and OECD illustrate how international organizations are trying to equalize the interests with standard procedures, cooperation, and investigations to avoid abuses. This research investigates if the letter and the spirit of law argument, by trusting individual agents' discernment to make fair and ethical decisions in taxation, can resolve stakeholders' discontentedness. The empirical analysis of four high-profile cases - Starbucks, Ikea, McDonald’s, and Apple - has indicated that legal tax structures may lead to controversial results and has revealed how laws may worsen the situation by not including tax events of new business models. After identifying the sources of aggressive tax strategies, it is possible to look at how international organizations are defending the spirit of the tax law. The challenges imposed by tax avoidance are innumerous and this inquire demonstrates that the debate around the spirit of the law does not improve the collective result of taxation. Multilateralism has been proved not to be enough to resolve the conflicts, but it may be, with some improvements in the letter of laws, the best chances for governments to resolve the matter.

Session #7:  International Tax II (Henry Ordower (St. Louis; Google Scholar), Chair/Discussant):
Different countries around the world address questions of tax fairness in different ways, and have different concerns based on constitutional differences or other particularities of the nations in question. In addition, changes in technology have changed the problems nations face in the international tax arena. The papers in this session consider the global consequences of international tax law and tax competition.

Stefanie Geringer (Vienna), Changes in Treatment and Tone in the EU’s External Fiscal Policy in Comparison to the OECD’s Approach:

The EU’s limited competencies in the field of direct taxation law have traditionally been interpreted in light of the relevance of fiscal policy for national sovereignty concepts. Its actions in the direct tax area have hence chiefly focused on punctual measures to harmonize the Member States’ corporate taxation systems. Nevertheless, initiatives for a joint external fiscal policy at the Union level have grown in importance in the 21st century, in particular in the shape of the EU’s standards for “good tax governance.”

Although the idea of good tax governance has been linked to issues such as transparency, administrative cooperation, and fair tax competition ever since, the EU’s approach to communicating, exporting, and executing its norms has undergone noticeable changes over the last 12 years. The Commission’s 2009 Communication on “Promoting Good Governance in Tax Matters” still referred to this concept in context with the definition of case-by-case solutions at the negotiation stage, thereby arguably acknowledging the importance of equal footing. By contrast, more recent instruments – most prominently the EU blacklist – are shaped by the unilateral imposition of EU standards and the parallel introduction of defensive (tax and non-tax) measures to encourage compliance by third countries, in particular developing and least developed countries. These developments have however not taken place in a vacuum, but ought to be understood against the background of the influence of relevant stakeholders and external powers, such as the OECD.

This paper aims to trace back the changes in treatment and tone in the EU’s external fiscal policy in the 21st century and contextualize these findings specifically with parallel initiatives on transparency, exchange of information, and BEPS at the OECD level. Beyond identifying convergences and divergences, these developments are critically assessed through the lens of equality, freedom, and humanity.

Diane Ring (Boston College; Google Scholar) & Costantino Grasso (Manchester; Google Scholar), Beyond Bribery: Exploring the Intimate Interconnections between Corruption and Tax Crimes:

Corruption is a multi-faceted and pervasive criminal phenomenon, which may negatively impact the effectiveness of counter tax crimes strategies. While it has been widely recognised that tax crimes and corruption are often intrinsically linked, corruption is too often simplistically understood as direct bribes paid to tax officials. This article argues that this limited perspective may distort justice by creating a false narrative, disregarding how other forms of pervasive corrupt behaviours adversely affect the fight against tax crimes. The research aims to expand the analysis of the interconnections between tax crimes and corrupt practices beyond simple bribery. Through a study of criminological and socio-legal literature, and the analysis of high-profile cases, this paper will examine the harmful tax practices adopted by national states utilising preferential tax regimes or sweetheart deals to compete against each other; investigate unethical lobbying practices and corporate powers distortion of the democratic process; and explore the undue interference through which anti-tax evasion strategies may be frustrated.

Steven Dean (Brooklyn), A Revolution in International Taxation:

A handful of experts from a homogenous group of countries shaped the international tax regime a century ago. (Jogarajan, 2018). The OECD’s recent efforts have been described as “a surprising throwback to a historic moment in international taxation, when four expert economists charted a path for the century to follow....by setting out terms that continue to control the discourse today, including by limiting countries’ exercise of the jurisdiction to tax on mutually agreeable terms.” (Christians, 2019, p. 497) Today, a small group of states continues to deploy their considerable resources towards charting a path consistent with their interests.

An inclusive formal cross-border rulemaking body such as that unrealized International Tax Organization would provide an opportunity for states to exercise the agenda-setting authority long wielded by the United States. Fortunately, the world need not wait to see whether a formal inclusive global tax governance structure takes shape. The same levers of informal control that have allowed the United States to be the deus ex machina of global tax policy could allow others to do the same. In a world in which more than half of the countries in Africa collect less than 15% of their GDP in taxes, less than the 20% the United Nations deemed necessary for sustainable development, (Waris, 2019, p. 27) revolution rather than evolution may be justified.

Joseph Fleming (BYU), The Decline of Deferral in U.S. International Tax Planning:

Prior to the 2017 TCJA, international tax planning by U.S. multinationals concentrated heavily on deferring U.S. residual tax on income earned in low-tax foreign countries and on enhancing the deferral benefit through cross-crediting and aggressive transfer pricing. Post TCJA, deferral planning has been rendered largely vestigial by the Section 965 transition tax, the GILTI regime, and the Section 245A dividends received deduction. Now international tax planning by U.S. multinationals must focus on maximizing the benefit of the low GILTI rate, cross-crediting within the GILTI foreign tax credit basket, minimizing Subpart F income, and shifting income from high-taxed foreign subsidiaries to low-taxed foreign subsidiaries. Aggressive transfer pricing remains an important tool.

Session #8:  Distributional Aspects of Tax & Tax Avoidance (Reuven Avi-Yonah (Michigan; Google Scholar), Chair/Discussant):
While the enforcement of laws has often been viewed as an unmitigated good, there are reasons to suspect that over-enforcement or shaming of taxpayers might not be the outcome we should prefer. The papers on this panel consider a variety of issues raised in the context of tax enforcement, with special attention paid to the distributional and equity concerns in the context of enforcement.

Noam Noked (CUHK; Google Scholar), Targeting Tax Avoidance Enablers: The Expansion and Internationalization of Mandatory Disclosure Rules:

The Panama Papers, the Paradise Papers, and most recently the Pandora Papers have exposed the role of intermediaries in enabling cross-border tax avoidance and evasion. In response, mandatory disclosure rules (MDRs), which require that intermediaries report their clients’ tax schemes, are becoming prominent tools in the international fight against tax avoidance and evasion. This Article analyzes the development of MDRs over the past four decades as a global phenomenon with three distinct phases beginning in the 1980s. The analysis reveals several trends: expansion in the types of schemes that are reportable, extension of reporting obligations to a great diversity of intermediaries, and increasing multilateralism in the effort to curb intermediary-enabled tax avoidance and evasion. This Article shows how developments in international tax policy have affected, and will likely continue to affect, the expansion and internationalization of MDRs.

Limor Riza (Ono; Google Scholar), Shaming Under the Cover of Tax Law:

The article examines the extent to which shaming is regulated by tax law itself, and questions its rationales under tax law in civil matters. Contrary to many other administrative disputes, tax disputes may be characterized by invasion of privacy. In order to assess their liability, taxpayers are required to reveal many private details. If this dispute reaches the court or the tax tribunal, and the tax decision is published, those published details on the taxpayer's life have the power to shame a reasonable taxpayer. The main argument of this article is that the common arguments of the general, longstanding privacy-publicity debate cannot be applied to tax hearings without acknowledging the distinctive characterization of tax law and without adding argumentations unique thereto. The first reasoning in support of this argument focuses on the detailed tax process in what I refer to as a semi-monopolist private-administrative process. In this process, taxpayers are in an inferior position vis-à-vis tax authorities. The second reasoning centers on in-camera hearings and the question of vertical equity. Many jurisdictions discriminate between taxpayers who have finalized their disputes within the tax authorities, whose case involves all their private matters and is not disclosed to the public, and those who reach the courts or the tax tribunals. In addition, the requirement to publish litigants’ names is mitigated in jurisdictions where the open court principle and the public right to know are not exercised in real time, since some tax hearings are held in-camera. The article calls for preventing taxpayer shaming within courts and tax tribunals in civil matters by changing the default rule so that the taxpayer's name and personal data are not specified in the tax verdict. We believe that this conclusion is the optimal outcome that upholds the principle of vertical equity in tax cases and maintains the balance between the right to privacy and the open court principle.

Orli Oren Kolbinger (Sapir), How to get Away with Tax Non-Compliance? Judicial Decision-Making in Equitable “Innocent Spouse Relief” Cases:

Every tax season, married taxpayers elect whether to file their tax returns jointly or separately. One consequence of filing jointly is “joint and several liability” which is the liability one spouse faces if the IRS finds the other spouse did not comply. Sometimes, however, one spouse files the joint return without knowing the other spouse is non-compliant. Sometimes that one spouse is a victim of domestic abuse.

Over the years, Congress has added relief provisions from joint and several liability to the IRC. Empirically, most relief seekers are women. Furthermore, relief-seekers prevail more in these cases compared with other types of tax disputes.

In its current form, this relief sets forth three routes. One is "equitable relief," including in the case of abuse by the non-requesting spouse. It provides the IRS and the courts a standard rather than a bright-line rule as guidance.

In 2013, the IRS initiated an important change to equitable relief. One of its goals was to clarify the existing standard for equitable relief and to add more flexibility to it. The IRS published a list of non-exclusive factors it considers when deciding on equitable relief requests. The most important changes include giving greater deference to the presence of abuse by the non-requesting spouse, and stating no single factor controls the determination. This meant that the requesting spouse’s knowledge was no longer the most important factor. The Tax Court has followed the IRS on this matter.

The reliance on equity in a sub-group of “innocent spouse” cases, rather than a purely legal perspective, raises practical and policy questions. In addition, the 2013 change allows for an empirical exploration of how different Tax Court judges decide in this set of equitable cases. In this article, I analyze the relationship between judges’ personal (e.g., gender and marital status) and professional attributes and their decisions in equitable relief requests before and after the 2013 change.

David Elkins (Netanya, Visiting NYU; Google Scholar), The Proper Response to Tax Avoidance: An Analytical Approach:

Anti-abuse provisions abound in the Internal Revenue Code, and there exits an extensive literature discussing the appropriateness of such measures. However, one particular aspect of the issue seems to have escaped attention. In many if not most instances, alleged abuses are merely manifestations of underlying inconsistencies in the Code. In this article, I will argue that the appropriate response is not to make it more difficult to exploit the supposed loophole but rather to address the underlying inconsistency. Plugging loopholes is an undertaking that is not only doomed to failure but also likely to inflict considerable collateral damage on innocent parties. In contrast, uncovering and addressing the underlying inconsistency treats the disease instead of the symptoms and can lead to more coherent and consistent tax structure.

Joshua Blank (UC-Irvine; Google Scholar) & Ari Glogower (Ohio State; Google Scholar), The Tax Information Gap at the Top:

This article proposes reforms to third-party information reporting as an additional tool to address high-end tax noncompliance. Studies find tax compliance rates of approximately 90% to 95% for transactions where third-party information reporting applies. Employees earning wages, for example, are subject to information reporting and tax withholding by their employers. Many high-end taxpayers, in contrast, earn their income from businesses they own and from investments that are subject to little, if any, third-party information reporting. To address this disparity, this article proposes a series of means-based adjustments to the information reporting rules for high-end taxpayers and third parties, including an annual wealth reporting form, information-reporting obligations for large gift recipients, and increased information reporting by banks and financial institutions.

https://taxprof.typepad.com/taxprof_blog/2022/07/todays-law-society-and-taxation-panels-1.html

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