Paul L. Caron

Friday, May 19, 2023

Narotzki Posts Five Tax Papers On SSRN

Doron Narotzki (Akron; Google Scholar) has posted five tax papers on SSRN:

SSRNTax Implications of Contributing Appreciated Property Overseas, 179 Tax Notes Fed. 431 (April 17, 2023) (with Tamir Shanan (College of Management)): 

In this article, Narotzki and Shanan examine the application of section 367 to section 351 exchanges and the income inclusion issues that may arise upon a U.S. person’s contribution of property to a foreign entity. 

The Potential Federal Income Tax Liability of Foreign Digital Nomads, 179 Tax Notes Fed. 65 (April 3, 2023) (with Vered Kuperberg): 

In this article, Narotzki and Kuperberg examine the federal income tax implications for nonresident alien digital nomads working in the United States and argue that this growing group of workers should not be subject to U.S. federal income tax.

Corporate Income Tax: We Tried the Stick, How About the Carrot? (with Tamir Shanan (College of Management)): 

Due to corporations’ on-going focus on tax planning and their continuous efforts finding new tax minimization strategies, multinational corporations are not paying their “fair share” in taxes for a long time now, and as a result the federal corporate income tax law is unable to generate much tax revenues. The government’s response to this problem has always been the same: introducing new tax laws and regulations, revising old tax laws in order to shut-down the so-called “loop-holes” and hoping this will put an end to the problem of corporate income tax evasion. For decades this approach has failed us.

This paper examines the history of the corporate income tax regime and the evolution of corporate income tax avoidance practice/industry, which corresponded with the corporate income tax policy the U.S. government chose to adopt (anti abusive/avoidance rules) and unfortunately had minimal success over the years as the tax revenues large scale corporate groups is fairly modest and it seems that there is a consensus that these entities do not pay their fair share. The paper finally proposes to change the mindset and to adopt a new policy that would encourage entrepreneurs and corporations invest in the U.S. economy through tax and other economic incentives.

Our proposal would recommend adopting series of rules that in a way would allocate the positive externality such economic activity has over the U.S. economy between the IRS and the corporations and its shareholders.

Planning Around Excess Basis in Corporate Formation Transfers, 176 Tax Notes Fed. 1209 (August 22, 2022) (with Melanie McCoskey (Akron; Google Scholar): 

In this article, McCoskey and Narotzki explain why the basis rules under section 358 require tweaking when, in exchange for stock, a transferor of property also receives an installment note with excess basis.

Code Section 304: A Roadmap, An Updated Analysis, and Policy Considerations, 16 Va. L. & Bus. Rev. 471 (2022) (with Melanie McCoskey (Akron; Google Scholar):  

Code Section 304 requires the reclassification of stock sales between affiliated corporations as dividends. However, for many years, Code Section 304 has not fulfilled the original “anti-avoidance” tax policy that was behind its legislation. This article aims to provide an updated analysis and explanation of the mechanics of Code Section 304 and to provide some insight into the tax planning strategies that utilize Code Section 304 in order to minimize U.S. federal income tax. The article will also demonstrate how these tax avoidance results are still effective post-TCJA. The article will then suggest a potential tax law change to return this code section to its intended anti-abuse status. Finally, the article suggests reconsideration of the tax policy related to dividend distributions.

Scholarship, Tax, Tax Daily, Tax Scholarship | Permalink