Field: Tax MACs — A Study of M&A Termination Rights Triggered By Material Adverse Changes In Tax Law

Heather M. Field (UC-Hastings), Tax MACs: A Study of M&A Termination Rights Triggered by Material Adverse Changes in Tax Law, 73 Tax Law. 823 (2020):

A “Tax MAC” provision—one that triggers termination or other rights upon a material adverse change in tax law—can be crucial to a business deal if a change in tax law would change a party’s interest in consummating the deal, particularly at the specified price and on the articulated terms. Tax MAC provisions may be particularly important when taxpayers make business decisions in a political climate like today’s, when tax laws could change again, perhaps dramatically, if control of Congress and the White House changes. Yet little has been written about Tax MAC provisions. In response, I studied Tax MAC provisions included in publicly filed M&A agreements from the past five years, focusing on provisions that could trigger termination of the deal if tax laws change adversely. This Article details the findings of that study.

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The Tax Lawyer Publishes New Issue

The Tax Lawyer has published Vol. 73, No. 4 (Summer 2020):

• Leslie Book (Villanova) & Marilyn Ames (IRS Office of Chief Counsel (retired)), The Morass of the Anti-Injunction Act: A Review of the Cases and Major Issues, 73 Tax Law. 773 (2020)
• Bridget J. Crawford (Pace) & Jonathan G. Blattmachr (Milbank, New York), Basis and Bargain Sales: Income Tax and Other Concerns, 73 Tax Law.  801 (2020)
• Heather M. Field (UC-Hastings), Tax MACs: A Study of M&A Termination Rights Triggered by Material Adverse Changes in Tax Law, 73 Tax Law. 823 (2020)

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ABA Tax Section Hosts Free Webinar Today On Careers In Tax Law

The ABA Tax Section hosts a free virtual program on Careers in Tax Law today at 12:00 - 1:15 pm ET (9:00 - 10:15 am PT):

The program is intended for summer associates, law clerks, law students, and young lawyers who may be considering a career in tax law. Panelists will discuss their own career paths, provide advice, and give their perspective on the practice of federal tax law.

• Michael J. Desmond (Chief Counsel, IRS)
• Diana L. Erbsen (Partner, DLA Piper)
• Maurice B. Foley (Chief Judge, U.S. Tax Court)

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2020-22 ABA Tax Section Public Service Fellows

The 2020-2022 Christine A. Brunswick Public Service Fellowship Class:

• Shailana Dunn-Wall, a graduate of University of Nebraska College of Law, will work with Legal Aid of Nebraska to educate residents throughout Nebraska on the benefits of the Earned Income Tax Credit in an effort to increase the percentage of eligible taxpayers who claim the credit by filing a tax return.
• Terri Morris, a graduate of University of Richmond School of Law, will work with the Community Tax Law Project of Richmond, Virginia, on their Fight Against Financial Abuse project. Through this initiative, Terri will advocate, educate and engage local domestic violence survivors on tax issues surrounding financial abuse.

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ABA Tax Section Hosts Free CLE Webinar Today On Race And The Internal Revenue Code

The ABA Tax Section hosts a free CLE webinar on Race and the Internal Revenue Code today at 1:00 pm to 2:35 pm ET:

As the nation focuses on the many racial inequities that permeate society, this free webinar will explore how the federal tax code, state and local taxes and international taxation impact racial inequality.

The panel will feature a demonstration of a recently released interactive feature that traces IRS Form 1040 line by line to examine the impact of the federal tax code on racial and economic inequality. The panel will further explore the impact of colorblind tax data on social policy. Panelists will also discuss the racial inequities perpetuated through taxable treatment of employment discrimination damages and how race intersects with international tax law and policy.

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ABA Tax Section Names 2020-2021 John Nolan Fellows

ABA Tax Section Recognizes Outstanding Young Tax Lawyers, Names Six 2020-2021 John S. Nolan Fellows:

The American Bar Association Section of Taxation is pleased to announce the recipients of the 2020-2021 John S. Nolan Fellowships.

• Carina Federico (Crowell & Moring, Washington, D.C.)
• Morgan Klinzing (Pepper Hamilton, Philadelphia, PA)
• Galina “Allie” Petrova (Petrova Law, Greensboro, NC)
• Nancy Rossner (The Community Tax Law Project, Richmond, VA)
• Monisha Santamaria (Joint Committee on Taxation, Washington, D.C.)
• Timothy Todd (Liberty University School of Law, Richmond, VA)

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The Tax Lawyer Publishes New Issue

The Tax Lawyer has published Vol. 73, No. 3 (Spring 2020):

• John A. Townsend (Attorney, Houston, TX), Burden of Proof in Tax Cases: Valuation and Ranges—An Update, 73 Tax Law. 389 (2020)
• Keith Fogg (Harvard), Access to Judicial Review in Nondeficiency Tax Cases, 73 Tax Law. 435 (2020)
• Bruce A. McGovern (South Texas), Cassady V. Brewer (Georgia State), & James M. Delaney (Wyoming), Recent Developments in Federal Income Taxation: The Year 2019, 73 Tax Law. 501 (2020)

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Book & Ames: The Morass Of The Anti-Injunction Act

Leslie Book (Villanova) & Marilyn Ames (IRS Office of Chief Counsel (retired)), The Morass of the Anti-Injunction Act: a Review of the Cases and Major Issues, 73 Tax Law. ___ (2020):

As Congress gives the Internal Revenue Service more tasks to perform beyond its function of assessing and collecting taxes, courts, practitioners, and academics are struggling to apply the Anti-Injunction Act (AIA) as the IRS promulgates procedures in the course of fulfilling new mandates. The AIA has its origins in the post-Civil War era when the federal government established new procedures ensuring the assessment and collection of taxes. It may seem odd an over 150-year old provision is fueling a growing number of contested and controversial disputes. Yet, the AIA has taken on renewed importance as courts consider challenges to tax regulations and guidance, fueled in part by the increasing importance of administrative law in issues of tax procedure and administration.

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McGovern, Brewer & Delaney: 2019 Federal Income Tax Developments

Bruce A. McGovern (South Texas), Cassady V. Brewer (Georgia State) & James M. Delaney (Wyoming), Recent Developments in Federal Income Taxation: The Year 2019, 73 Tax Law. ___ (2020):

This article summarizes and provides context to understand the most important developments in federal income taxation for the year 2019. The items discussed primarily consist of the following: (i) significant amendments to the Internal Revenue Code; (ii) important judicial decisions; and (iii) noteworthy administrative rulings and regulations promulgated by the Service and the Treasury Department. This article primarily focuses on subjects of broad general interest — tax accounting rules, determination of gross income, allowable deductions, treatment of capital gains and losses, corporate and partnership taxation, exempt organizations, and procedure and penalties.

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Winners Of The 19th Annual Law Student Tax Challenge

ABA Tax Section, Winners of the 19th Annual Law Student Tax Challenge:

J.D. Division

1st Place:
Amanda Krugler and Scott Sullivan [right, with ABA Tax Section Chair Thomas Callahan] [more here]
University of Kentucky College of Law
Coach:  Jennifer Bird-Pollan

2nd Place (Tie):
Matthew Foran and Harry Gao
Seton Hall Law School
Brian Krastev and Matthew Marcellino
Syracuse University College of Law

Best Written Submission:
Ryan Hartnett and Mitchell Renfrew
Western New England University School of Law

Semi-Finalists:
Anita Alanko and Jennifer Galstad
Catholic University of America, Columbus School of Law

Mark Watterson and Taylor Monroe
UNT Dallas College of Law

Ryan Hartnett and Mitchell Renfrew
Western New England University School of Law

LL.M. Division

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Crawford & Blattmachr: Basis And Bargain Sales

Bridget J. Crawford (Pace) & Jonathan G. Blattmachr (Milbank, New York), Basis and Bargain Sales: Income Tax and Other Concerns, 73 Tax Law. ___ (2020):

This article explores the income tax consequences of the sale during lifetime and at death of property for less than fair market value. The analysis focuses in particular on the tax consequences of a bargain sale by a transferor who wishes to confer some financial benefit on a family member, but leave the rest of her estate to charity. Generally speaking, death-time bargain sales may be preferable to similar transactions during lifetime, if the assets have a low basis pre-death, because of the step up in income tax basis under section 1014.

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2020 ABA Tax Section Janet Spragens Pro Bono Award

Press Release, ABA Section of Taxation Awards 2020 Janet Spragens Pro Bono Award to Hardin Matthews, Kelley Miller and Larry Sannicandro:

Hardin Matthews spent an exceptional career embodying the very characteristics this award seeks to acknowledge. His dedication to low-income taxpayers is noteworthy not only for the years of service, but also for the breadth of service. After retiring from Ropes & Gray, where he performed pro bono services for clients over the many years of his career, he dedicated himself to finding ways to help low-income taxpayers. He completed a year-long fellowship with the Access to Justice Program at Greater Boston Legal Services (GBLS) and continued to volunteer after the fellowship dedicating over 3,700 hours of volunteer attorney time in just five years. He goes above and beyond in his service to taxpayers, linking them to other needed resources. In addition to achieving life-changing victories for low-income taxpayers, he is a steady source of legal research and mentorship for other attorneys both at GBLS and Harvard’s Low-Income Taxpayer Clinic (LITC). Hardin volunteers for the Volunteer Income Tax Assistance (VITA) program in Chelsea and Revere, Massachusetts. He also led a statewide advocacy project to improve the interactions of low-income taxpayers with the state revenue agency in Massachusetts.

Kelley Miller [Reed Smith, Washington, D.C.] and Larry Sannicandro [McCarter & English, Newark ] were jointly selected to receive the Janet Spragens Pro Bono Award because in designing and implementing the Exonerees’ Tax Assistance Network, they created an entirely new form of low-income taxpayer assistance that is nothing short of extraordinary. For years, wrongfully incarcerated individuals who received compensation for their time behind bars were required to pay income taxes on the settlements they received from government organizations responsible for their wrongful incarceration. Congress changed the law in 2015 to exempt exonerees from paying income taxes on civil damages, restitution or other monetary awards received as compensation for their wrongful incarceration. Despite the passage of the Wrongful Conviction Tax Relief Act of 2015, many exonerated individuals remain unaware of their right to a refund of tax paid on their compensation, much less the applicable filing deadlines. Kelley Miller and Larry Sannicandro saw an opportunity to help people who have been significantly disenfranchised and would not otherwise have the ability to claim what is rightfully theirs.

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The Tax Lawyer Publishes New Issue

The Tax Lawyer has published Vol. 73, No. 2 (Winter 2020):

• Stephanie Hunter McMahon (Cincinnati), Classifying Tax Guidance According to End Users, 73 Tax Law. 245 (2020)
• Jeffrey T. Sheffield (Senior Lecturer, Northwestern; Partner, Kirkland & Ellis), Whose Earnings and Profits? What Dividend? A Discussion Based on the Dr Pepper-Keurig Transaction, 73 Tax Law. 299 (2020)
• Jeffrey A. Cooper (Quinnipiac), Red States, Blue States: Lessons from the State Death Tax Credit and the “SALT” Deduction, 73 Tax Law. 341 (2020) (reviewed by David Elkins (Netanya) here)

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ABA Tax Section Mid-Year Meeting

The ABA Tax Section Midyear Meeting concludes today in Boca Raton, Florida. The full program is here. The highlight of the program is:

Teaching Taxation: Opportunity Zones – Two Years In
The Tax Cuts and Jobs Act enacted in December 2017 included a new provision intended to direct investment into low-income communities through a combination of tax benefits for investors (deferral, partial reductions in gains, and exclusions of future appreciation). Though the enactment of such targeted tax incentives is not entirely new, the design of this provision has raised significant questions for investing taxpayers seeking to secure the tax benefits and for public policy advocates assessing whether the Opportunity Zone provisions achieve their stated goals. To explore all of these issues, this panel will discuss the design of the new incentive, who is making the investments, where, in what projects, how much is being invested, who is securing the benefits, and what will be the likely community impact. The panel also considers the current data reporting requirements and what/whether data should be made public to facilitate assessment of the program’s success in promoting economic growth in low-income areas.

• Edward De Barbieri (Albany)
• Michelle Layser (Illinois)
• Ellen Aprill (Loyola-L.A.) (moderator)

Other Tax Profs with speaking roles include:

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The Tax Lawyer Publishes New Issue

The Tax Lawyer has published Vol. 73, No. 1 (Fall 2019):

• Bryan T. Camp (Texas Tech), New Thinking About Jurisdictional Time Periods in the Tax Code, 73 Tax Law. 1 (2019)
• Steven Z. Hodaszy (Robert Morris), The Curious Case of Section 461(l): Why This Unclear and Unwise New Rule Should Be Construed as Narrowly as Possible, 73 Tax Law. 61 (2019)
• Shay Moyal (S.J.D. (Taxation) 2020, Michigan), Back to Basics: Rethinking Normative Principles in International Tax, 73 Tax Law. 165 (2019)
• Mary Roche Waller (Jones Day, Chicago), Sex Inequality in the United States and French Income Tax Filing Systems, 73 Tax Law. 207 (2019)

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2019 Tannenwald Tax Writing Competition Winners

The Theodore Tannenwald, Jr. Foundation for Excellence in Tax Scholarship has announced the winners of the  2019 tax writing competition:

First Prize ($5,000):
Christine Davis (Florida), More Anti-Simplification: PTI and GILTI After the Tax Cuts and Jobs Act
Faculty Sponsor:  Mindy Herzfeld

Second Prize ($2,000):
Alexandra Ferrera (NYU), Incentivizing the Care of Adult Family Members Through a Two-Part Tax Credit
Faculty Sponsor:  Lily Batchelder

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ABA Tax Section Fall Meeting

The ABA Tax Section kicks off its three-day joint fall meeting with the ABA Real Property, Trust and Estate Law Section today in San Francisco. The full program is here. The highlight is:

Teaching Taxation: Technology-Driven Trends in Tax Law Training
This panel explores the changing ways in which lawyers can, and are expected to, train themselves to excel in tax practice in an age of pervasive technology. Formal law firm training of associates is less common than before the Great Recession. Clients no longer are willing to subsidize the training of new associates. Tax associates must arrange to train themselves, outside their full-time, billable work obligations. The panel will discuss various training options (including residential and online LLM programs, online courses, webinars, podcasts, and mixed programs) by which tax lawyers can create a solid foundation for their tax practice and expand their knowledge into new tax subspecialties. These training options employ a range of pedagogical approaches, reflecting ongoing study and experimentation in online learning. The panel will highlight educational best practices, based on learning theory. In addition, the Panel will explore parameters by which lawyer-consumers of such training and employer-firms can assess the success of various training options.

• Leslie Book (Villanova)
• Steven Dean (NYU)
• Mirit Eyal-Cohen (Alabama)
• Heather Field (UC-Hastings) (moderator)
• Samuel Greenberg (EY, Los Angeles)
• Michael Hunter Schwartz (McGeorge)
• Ryan Montgomery (Morgan Lewis, Boston)
• Annette Nellen (San José)
• Katherine Pratt (Loyola-L.A.)

Other Tax Profs with speaking roles include:

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Cooper: Lessons From The State Death Tax Credit And The SALT Deduction

Jeffrey A. Cooper (Quinnipiac), Red States, Blue States: Lessons from the State Death Tax Credit and the 'SALT' Deduction, 73 Tax Law. ___ (2020):

Since 1861, every version of the federal income tax has included a deduction for state and local taxes (often referred to by its popular acronym “SALT”). Since this provision, the “SALT deduction,” minimizes the effect of state and local taxes on taxpayers, it offers greater benefits to those living in states that impose the highest tax burden — the high-tax “blue” states. In 2017, the Tax Cuts and Jobs Act marked a major shift in this long-established federal policy toward state taxes. Among its many provisions, the Act capped the SALT deduction at $10,000 per married couple, providing no Federal tax offset for amounts paid in excess of that amount.

In this article, I attempt to address two questions raised by this turn of events. First, how will states respond to this change in federal law? Second, does the capping of the SALT deduction represent a major shift in federal-state relations, an unprecedented attack on blue states, or is it simply politics as usual?

My novel approach to the subject is to consider these questions by exploring the similarities and contrasts between the income tax SALT deduction and the estate tax state death tax credit, which was established in 1924 and repealed in 2001. Viewing the 2017 legislation within this broader historical context more reveals trends and patterns, providing greater insight than would a study of the SALT deduction in isolation.

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ABA Tax Section Releases 19th Annual Law Student Tax Challenge Problem

The ABA Tax Section has released the J.D. Problem (rules; entry form) and LL.M. Problem (rules; entry form) for the 19th Annual Law Student Tax Challenge:

An alternative to traditional moot court competitions, the Law Student Tax Challenge asks two-person teams of students to solve a cutting-edge and complex business problem that might arise in everyday tax practice. Teams are initially evaluated on two criteria: a memorandum to a senior partner and a letter to a client explaining the result. Based on the written work product, six teams from the J.D. Division and four teams from the LL.M. Division receive a free trip (including airfare and accommodations for two nights) to the Section of Taxation 2020 Midyear Meeting, January 30-February 1, in Boca Raton, FL, where each team will defend its submission before a panel of judges representing the country’s top tax practitioners and government officials, including Tax Court judges.

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The Tax Lawyer Publishes New Issue

The Tax Lawyer has published Vol. 72, No. 4 (Summer 2019):

• R. Lainie W. Harris (Georgia Southern University), Did the Supreme Court Do Congress’s Dirty Work When It Killed Quill? State Sales Tax on Remote Sellers and Wayfair, 72 Tax Law. 671 (2019)
• Bruce A. McGovern (South Texas) & Cassady V. (“Cass”) Brewer (Georgia State), Recent Developments in Federal Income Taxation: The Year 2018, 72 Tax Law. 695 (2019)

Tax Issues In Dr. Pepper's Acquisition Of Keurig

Jeffrey Sheffield (Senior Lecturer, Northwestern; Partner, Kirkland & Ellis), Whose Earnings and Profits? What Dividend? A Discussion Based on the Dr. Pepper - Keurig Transaction, 72 Tax Law. __ (2019):

In July 2018 Dr. Pepper Snapple Group, Inc. (“Dr. Pepper”) acquired all the stock of the Maple Parent Holdings Corp. (better known as “Keurig”) in exchange for Dr. Pepper common stock. The acquisition was unusual in two respects: Dr. Pepper paid its shareholders a pre-merger “special dividend” equal to approximately 87% of the stock’s value; and Dr. Pepper then issued to Keurig’s shareholders Dr. Pepper stock equal to approximately 87% of the combined companies’ stock. It is this combination of events that gives rise to the tax issues discussed in this article.

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This Week's Ten Most Popular TaxProf Blog Posts

1. Kellye Testy (President & CEO, LSAC), Building the Future of Justice: Law School Applicants 2019
2. Bryan Camp (Texas Tech), Lesson From The Tax Court: Appeals Is Still Part Of The IRS, Really!
3. Paul Caron (Dean, Pepperdine), The Tension Between Diversity and the U.S. News Law School Rankings
4. Joni Hersch (Vanderbilt) & Erin E. Meyers (Vanderbilt), Why Are Seemingly Satisfied Female Lawyers Running For The Exits?
5. ABA Journal, Conservative 3L Says Gonzaga Law School's Liberal Bias Infringes His First Amendment Rights
6. Paul Caron (Dean, Pepperdine), Fellowships For Aspiring Law Professors (2019-20 Edition)
7. Alan Morrison (George Washington), My Taxes (And Donald Trump's) Are None of Your Business
8. Anthony Kronman (Yale), The Downside of Diversity: Assault On American Excellence
9. NY Times, As Mortgage-Interest Deduction Vanishes, Home Buyers And The Housing Market Merely Shrug
10. Paul Caron (Dean, Pepperdine), A Dean's Perspective On Diversity, Socioeconomics, The LSAT, And The U.S. News Law School Rankings

Rethinking Normative Principles In International Tax

Shay Shimon Moyal (S.J.D. 2020, Michigan), Back to Basics: Rethinking Normative Principles in International Tax, 73 Tax Law. ___ (2019):

International Tax is a relatively new legal system that lacks clear objectives and principles. These principles, which guide unilateral legislation and multilateral coordination, have not been discussed thoroughly through the lenses of jurisprudence and legal philosophy. This paper offers a unique jurisprudential analysis of normative International Tax principles by redefining them and clarifying several basic assumptions.

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McGovern & Brewer: 2018 Federal Income Tax Developments

Bruce A. McGovern (South Texas) & Cassady V. Brewer (Georgia State), Recent Developments in Federal Income Taxation: The Year 2018, 72 Tax Law. __ (2019) (134 pages):

This article summarizes and provides context to understand the most important developments in federal income taxation for the year 2018. The items discussed primarily consist of the following: (i) significant amendments to the Internal Revenue Code; (ii) important judicial decisions; and (iii) noteworthy administrative rulings and regulations promulgated by the Service and Treasury. The article focuses primarily on subjects of broad general interest — tax accounting rules, determination of gross income, allowable deductions, treatment of capital gains and losses, corporate and partnership taxation, exempt organizations, and procedure and penalties.

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ABA Tax Section Names 2019-2020 John Nolan Fellows

ABA Tax Swction Recognizes Outstanding Young Tax Lawyers, Names Six 2019-2020 John S. Nolan Fellows:

The American Bar Association Section of Taxation announced the recipients of the 2019-2020 John S. Nolan Fellows at the Section’s May Meeting in Washington:

• Arielle Borsos (Caplin & Drysdale, Washington, D.C.)
• Phillip Colasanto (Agostino & Associates, Hackensack, NJ)
• Sarah Haradon (Holland & Hart, Denver)
• Travis Thompson (Sideman & Bancroft, San Francisco)
• Shamik Trivedi (Grant Thornton, Washington, D.C.)
• Lany Villalobos (Dechert, Philadelphia)

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2018-20 ABA Tax Section Public Service Fellows

American Bar Association Section of Taxation announces Public Service Fellows

The American Bar Association Section of Taxation has selected its 2018-2020 Christine A. Brunswick Public Service Fellows:

• Evan Phoenix, a graduate of Saint Thomas University School of Law, will be working with the Bet Tzedek Legal Services in Los Angeles, California, to provide tax education, advocacy, and representation on behalf of current military service members, veterans, and ESL (English as a second language) taxpayers.
• Andre Robinson, a graduate of Loyola University New Orleans College of Law, will be working with the Low-Income Tax Clinic at Southeast Louisiana Legal Services in New Orleans, Louisiana to provide education and tax services to taxpayers returning to society after being incarcerated, as well as to micro-business and small-business owners.

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The Tax Lawyer Publishes New Issue

The Tax Lawyer has published Vol. 72, No. 3 (Spring 2019):

• Karen C. Burke (Florida), Section 199A and Choice of Passthrough Entity, 72 Tax Law. 551 (2019)
• Eric Lopresti (National Taxpayer Advocate), What’s Wrong with Strict Liability and Nonmonetary Penalties? The Case for Reasonable Fault-Based Civil Tax Penalties and Procedural Protections, 72 Tax Law. 589 (2019)
• Richard M. Lipton (Baker McKenzie, Chicago), 2019 Erwin N. Griswold Lecture Before the American College of Tax Counsel: Proper Application of the Judicial Doctrines and the Elimination of Section “I Don’t Like It,” 72 Tax Law. 621 (2019)

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ABA Tax Section May Meeting

The highlight of the ABA Tax Section May Meeting (program) in Washington, D.C. for Tax Profs is the Teaching Taxation Program:

Higher Education and Taxation: Are We Getting Tax Policy Right for the Mission of Education? The country is in a battle over the role, place, and funding of higher education. Who is it for? How should it be financed? What should it provide? The tax law impacts higher education in significant ways. This panel will examine those impacts and consider whether we get that policy right, and whether any changes are needed. The 2017 Tax Act imposed new taxes on colleges and universities with large endowments and big salaries. What will be the impact of these changes? Should public universities be able to elect in and out of section 501(c)(3) status? If so, should they be subject to a special set of rules? For-profit higher education providers are increasingly converting to nonprofit status in order to take advantages of benefits provided to tax exempt entities. Should there be rules limiting the entry of for-profit organizations? Tax law also impacts student borrowing. Do we get the incentives right or could we do better in structuring those incentives to benefit those in need?

• Ellen Aprill (Loyola-L.A.)
• Brian Galle (Georgetown)
• Philip Hackney (Pittsburgh) (moderator)
• Benjamin Leff (American)
• Alexandra Mitchell (RSM US LLP, Washington, D.C.)
• Kerry Ryan (Saint Louis) (chair)

Other Tax Prof speakers at the May Meeting:

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Winners Of The 18th Annual Law Student Tax Challenge

ABA Tax Section, 18th Annual Law Student Tax Challenge Winners:

J.D. Division

1st Place:
Jordan Fruchter and Thomas Boland
Albany Law School
Coach: Danshera Cords

2nd Place:
Emily Eash and Eliana Hoeppner
Western New England University

3rd Place:
Luis Garcia and Janette Duran
University of New Mexico Law School

Best Written Submission:
Luis Garcia and Janette Duran
University of New Mexico Law School

Semi-Finalists:
Scott Lee and Brittany Johnson
Georgetown University

Daniel Rowe and Mark Goshgarian
Loyola Law School

Kaitlyn Cornett and Thomas Koelbl
University of Memphis

LL.M. Division

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The Tax Lawyer Publishes New Issue

The Tax Lawyer has published Vol. 72, No. 2 (Winter 2019):

• ABA Tax Section, Initial Comments Concerning the Aggregation and Disaggregation of Trade or Business Activities for Purposes of Section 199A, 72 Tax Law. 381 (2019)
• ABA Tax Section, Comments Concerning the Specialized Service Trade or Business Activities for Purposes of Section 199A, 72 Tax Law. 389 (2019)
• ABA Tax Section, Comments Concerning the Treatment of Losses and Certain Other Issues Regarding the Section 199A Deduction, 72 Tax Law. 401 (2019)
• Sean Anderson (Illinois) & Andrew Morrison Stumpff (Michigan), Proposal for a Non-Subsidized, Non-Retirement-Plan, Employee-Owned Investment Vehicle to Replace the ESOP, 72 Tax Law. 425  (2019)
• Phillip G. Cohen (Pace),  The Compulsory Tax Constraint for Foreign Tax Credits Post TCJA & Coca-Cola Co. v. Commissioner, 72 Tax Law. 445 (2019)
• David Hasen (Florida), Asset Basis in Acquisitive Reorganizations: General Utilities Hangover, 72 Tax Law. 481 (2019)

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ABA Tax Section Publishes New Issue Of Tax Times

The ABA Tax Section has published 38 Tax Times No. 2 (Feb. 2019).

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2018-20 ABA Tax Section Public Service Fellows

The 2018-2020 Christine A. Brunswick Public Service Fellowship Class:

• Anastassia Kolosova, a graduate of the University of Michigan Law School, will be working with the Accounting Aid Society, in Detroit, Michigan, to conduct outreach and education activities for specific vulnerable populations in Detroit and expand the organization’s ability to provide legal representation to low-income taxpayers.
• Omeed Firouzi, a graduate of Villanova University Charles Widger School of Law, will be working with Philadelphia Legal Assistance to provide education and legal assistance to workers misclassified as independent contractors and conduct advocacy and awareness efforts to decrease the practice among employers in Philadelphia.

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ABA Tax Section Midyear Meeting

The ABA Tax Section Midyear Meeting kicks off today in New Orleans. Two highlights are:

Teaching Taxation: Tax Advice in the Age of the 24-Hour News Cycle
Recent instances of exposure by the press of aggressive tax planning and tax avoidance by prominent businesses, individuals or families raise unique substantive, ethical, and other legal issues for the tax community. Practitioners advising famous clients may need to assess not only the likelihood of future examinations, but also public disclosure due to whistleblowers, cooperators, and data leaks. Reporters investigating past tax compliance may recruit tax professionals for technical assistance and expertise to uncover suspect transactions, unreported income, or improper deductions or credits. The release of such information, and related commentary from various media outlets, may pressure Federal and state tax authorities, law enforcement officials, or regulators to open audits or investigations that could result in substantial tax adjustments and/or various civil and criminal penalties. This panel will explore these issues from a variety of perspectives.

• Caroline Ciraolo (Kostelanetz & Fink, Washington, D.C.)
• David Cay Johnston (DCReport.org)
• Michael Lang (Chapman) 
• Michael Plowgian (KPMG, Washington, D.C.)
• Kerry Ryan (St. Louis) (Chair)
• Lee-Ford Tritt (Florida) (moderator)

Teaching Taxation: Current Developments in Individual, Corporate, Partnership, and Estate & Gift Taxation
This session will review the most significant statutory enactments, judicial decisions, IRS rulings,
and Treasury regulations promulgated during the last twelve months that affect general income
taxation, corporate taxation, partnership taxation, wealth transfer taxation, and tax procedure.

• Elaine Gagliardi (Montana)
• Philip Hackney (Pittsburgh)
• Bruce McGovern (South Texas) (moderator)

Other Tax Prof speakers include:

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The Tax Lawyer Publishes New Issue

The Tax Lawyer has published Vol. 72, No. 1 (Fall 2018):

• ABA Tax Section, Recommendations for the 2018-2019 Department of the Treasury and Internal Revenue Service Priority Guidance Plan Related to the Act, 72 Tax Law. 1 (2018)
• ABA Tax Section, Second Set of Recommendations for the 2018-2019 Department of the Treasury and Internal Revenue Service Priority Guidance Plan, 72 Tax Law. 15 (2018)
• ABA Tax Section, Comments on the Tax Treatment of Hard Forks, 72 Tax Law. 27 (2018)

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ABA Tax Section Publishes New Issue Of Tax Times

The ABA Tax Section has published 38 Tax Times No. 1 (Nov. 2018)

2018 Tannenwald Tax Writing Competition Winners

The Theodore Tannenwald, Jr. Foundation for Excellence in Tax Scholarship has announced the winners of the 2018 tax writing competition:

First Prize ($5,000):
Colin T. Halpin (Washburn), A Step in the Right Direction: The Effects of the Tax Cuts and Jobs Act on the Alternative Minimum Tax and the Need for Further Reform
Faculty Sponsor:  Lori McMillan

Second Prize ($2,000):
Betting on an Uncertain Future: The Tax Consequences of Large Third-Party Litigation Financing
Faculty Sponsor:  Gregg Polsky

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The Tax Lawyer Publishes New Issue

The Tax Lawyer has published Vol. 71, No. 4 (Summer 2018):

• ABA Section of Taxation, State and Local Taxes Committee, An Examination of Unclaimed Property Laws after the Adoption of RUUPA: Suggestions for Continued Advancement, 71 Tax Law. 941  (2018)
• Niki Ford (Baker & McKenzie, New York), Tax Reform in a “World Without Chevron”: Will Tax Regulations Withstand the Review of Justice Gorsuch?, 71 Tax Law. 975 (2018)
• Dan M. Smolnik (Pastore & Dailey, Stamford, CT), The Connecticut Municipal Property Tax: Its Roots and Branches, 71 Tax Law. 1011 (2018)

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ABA Administrative Law Conference

Tax Profs with speaking roles at the ABA Administrative Law Conference (Nov. 1-2):

Kristin Hickman (Minnesota), Is Agency Guidance Reviewable (And If So, When)?:

This panel will look at what the federal courts have said about the reviewability of agency guidance, including the rescission of guidance, both in facial challenges and in the enforcement context. All conference attendees should be interested in this program given the important role of agency guidance and the inconsistent case law on the central question presented. Key issues that will be address will include: (i) the treatment of "guidance" within the Administrative Procedure Act (e.g., statements of policy and interpretative rules); (ii) how the courts have grappled with statements of policy and interpretative rules, including application of the APA's "final agency action" requirement; (iii) when "guidance" may be regarded as de facto "legislative rulemaking" for purposes of judicial review; and (iv) whether the form of publication (e.g., "demand letter" or enforcement v. generally applicable "policy bulletin" or "letter of interpretation") and means of publication (e.g., Federal Register, web posting, blast email) affects the question of reviewability, including the subsidiary question of administrative exhaustion. The practical skill attendees will take back to their respective practices after attending this session will be, among other things, a better understanding of the importance to judicial review of how guidance is drafted, i.e., how language is used to communicate the agency's message and the potential legal consequences of that language.

Shu-Yi Oei (Boston College) & Leigh Osofsky (North Carolina), The Role of Agencies in Legislative Drafting and Legislative Cleanup:

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ABA Tax Section Fall CLE Meeting

The ABA Tax Section kicks off its three-day joint fall meeting with the ABA Real Property, Trust and Estate Law Section today in Atllanta.  The full program is here. The highlight is:

Individual & Family Taxation — SALT Deduction Limit Workarounds Panel. This panel will discuss the various strategies that States are implementing to provide a workaround to the 2017 Tax Act’s state and local tax deduction limit. In general, these programs use contributions to various state-sponsored funds or programs that offer a credit against state tax liability. The panel will evaluate and discuss the legal merits of such workarounds.

• Andy Grewal (Iowa)
• Kirk Stark (UCLA)
• Timothy Todd (Liberty)

Other Tax Profs with speaking roles include:

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Hasen: Asset Basis In Acquisitive Asset Reorganizations — General Utilities Hangover

David Hasen (Florida), Asset Basis in Acquisitive Asset Reorganizations: General Utilities Hangover, 72 Tax Law. ___ (2019):

The rules that govern the tax basis and, by extension, the holding period of property received by an acquired corporation in an acquisitive reorganization are an unlovely patchwork that emerged from major changes to the tax law in 1986 and 1988. They not only fail to provide clarity but also do not reflect the fact that the acquired corporation, to the extent it engages in post-reorganization activity pursuant to the overall plan of reorganization, is in substance the agent of the acquiring corporation. Congress should amend the reorganization provisions to reflect this circumstance.

ABA Tax Section Releases 18th Annual Law Student Tax Challenge Problem

The ABA Tax Section has released the J.D. Problem (rules; entry form) and LL.M. Problem (rules; entry form) for the 18th Annual Law Student Tax Challenge:

An alternative to traditional moot court competitions, the Law Student Tax Challenge asks two-person teams of students to solve a cutting-edge and complex business problem that might arise in everyday tax practice. Teams are initially evaluated on two criteria: a memorandum to a senior partner and a letter to a client explaining the result. Based on the written work product, six teams from the J.D. Division and four teams from the LL .M. Division receive a free trip (including airfare and accommodations for two nights) to the Section of Taxation 2019 Midyear Meeting, January 17-19, 2019 in New Orleans, where each team will defend its submission before a panel of judges consisting of the country’s top tax practitioners and government officials, including tax court judges. The competition is a great way for law students to showcase their knowledge in a real-world setting and gain valuable exposure to the tax law community. On average, more than 50 teams compete in the J.D. Division and more than 30 teams compete in the LL .M. Division.

IMPORTANT DATES

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Section 355 Revisited: Time For A Major Overhaul?

Herbert N. Beller (Northwestern), Section 355 Revisited: Time for a Major Overhaul?, 71 Tax Law. ___ (2018):

Section 355 of the Internal Revenue Code permits a corporation that conducts multiple active businesses to distribute controlling stock ownership interests in one or more of such businesses to all or some of its shareholders on a tax-free basis, provided that various statutory and non-statutory requirements are met. Commonly known as “spin-offs”, “split-offs” and “split-ups”, qualifying section 355 distributions are often preceded by a transfer of assets (and sometimes liabilities) into the distributed controlled corporation, as part of an overall type “D” divisive “reorganization” described in section 368(a)(1)(D). Non-recognition treatment for at least some forms of corporate separations dates back to the Revenue Act of 1918. The 1954 Code iteration of section 355, which continues to provide the basic statutory framework for tax-free treatment, has been amended several times in order to tighten various qualification requirements and, in certain instances, to impose a corporate level tax on the distributing corporation (via sections 355(d) and (e)) even through the transaction still generates tax–free treatment at the shareholder level. In general, however, the primary distinguishing tax feature of section 355 transactions is that they permit tax-free treatment at both the shareholder and corporate levels, thus constituting the principal exception to the statutory repeal of the so-called General Utilities doctrine during the mid-1980s. The main premise of this article is that section 355 is due for a major overhaul.

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ABA Tax Section Publishes New Issue Of Tax Times

The ABA Tax Section has published 37 Tax Times No. 4 (August 2018)

Brown: Proposing A Single, Simpler Test For Cash Equivalency

Fred B. Brown (Baltimore), Proposing a Single, Simpler Test for Cash Equivalency, 71 Tax Law. 543 (2018):

Under the cash method of accounting, generally taxpayers include income items that are received in the form of cash, checks, and property, in the year in which they are received. Under the cash equivalency doctrine, a promise to pay an amount in the future, even though it is a property right, generally will be included upon receipt only if the promise to pay constitutes a cash equivalent.

Whether an obligation is a cash equivalent is generally determined based on common law standards developed by the courts with some assistance from the Service. As a consequence, the current approach to cash equivalency suffers from the lack of a uniform standard. There is also uncertainty in applying the particular tests, given the fact-intensive, imprecise inquiry that is required. In addition, the current standards for cash equivalency may also present liquidity difficulties for taxpayers.

To address these problems, this article proposes a single test for determining whether an obligation calling for future payments is a cash equivalent.

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The Tax Lawyer Publishes New Issue

The Tax Lawyer has published Vol. 71, No. 3 (Winter 2018):

• Martin J. McMahon, Jr. (Florida), 2018 Erwin N. Griswold Lecture Before the American College of Tax Counsel: Tax Policy Elegy, 71 Tax Law. 421  (2018)
• Jerred G. Blanchard, Jr. (Baker & McKenzie, Houston), The Ghost of Kimbell-Diamond: The Current State of the Law Pertaining to Multi-Step Corporate Transactions, 71 Tax Law.  445 (2018)
• Bradley T. Borden (Brooklyn) & Sang Hee Lee (Ernst & Young, New York), Quantitative Prediction Model of Tax Law’s Substantial Authority, 71 Tax Law. 543 (2018)
• Fred B. Brown (Baltimore), Proposing a Single, Simpler Test for Cash Equivalency, 71 Tax Law.  591 (2018)
• Philip G. Cohen (Pace), The Fact of the Liability Requirement in the All Events Test—Flying Lessons over the Dark Clouds of General Dynamics from a Giant Eagle, 71 Tax Law. 635 (2018)
• Eric A. San Juan (Georgetown), The Distributive State and the Function of Tax Expenditures, 71 Tax Law. 673 (2018)

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ABA Tax Section Awards

• 2018 Distinguished Service Award:  Susan P. Serota (Pillsbury Winthrop Shaw Pittman, New York)
• 2018 Janet Spragens Pro Bono Award:  Kathryn Sedo (Minnesota & Michigan tax clinics),  Dale Kensinger (Harvard tax clinic)

McGovern & Brewer: 2017 Federal Income Tax Developments

Bruce A. McGovern (South Texas) & Cassady V. Brewer (Georgia State), Recent Developments in Federal Income Taxation: The Year 2017, 71 Tax Law. ___ (2018) (139 pages):

These materials discuss as well as provide context to understand the significance of the most important judicial decisions and administrative rulings and regulations promulgated by the Service and Treasury during 2017. Amendments to the Code generally are not discussed except to the extent that they are of major significance, they have led to administrative rulings and regulations, or they have affected previously issued rulings and regulations otherwise covered by these materials. These materials focus primarily on topics of broad general interest — income tax accounting rules, determination of gross income, allowable deductions, treatment of capital gains and losses, corporate and partnership taxation, exempt organizations, and procedure and penalties.

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ABA Tax Section Publishes New Issue Of Tax Times

The ABA Tax Section has published 37 Tax Times No. 3 (May 2018)

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