Paul L. Caron
Dean



Monday, September 28, 2020

Lesson From The Tax Court: State Law Matters

Tax Court (2020)My wife has spent her COVID time organizing efforts to celebrate Earth Day next April in our fair city of Lubbock, Texas.  Her efforts are paying off.  She and her colleagues are now to the point where they need to operate through a tax-exempt entity.  Well-meaning friends tell her “oh, it’s easy, just go fill out some forms and submit them to the IRS.”  Those friends think that forming a nonprofit entity is a one-step process, done at the federal level.  They do not realize that it is a two-step process: one must first form the entity under state law and then ask for tax-exemption from the IRS.  Today we learn that the choice of entity formation will affect the federal tax treatment of that entity.

In Clinton Deckard v. Commissioner, 155 T.C. No. 8 (Sept. 17, 2020) (Judge Thornton), the effect of state law was to preclude the taxpayer from electing S Corporation status.  There Mr. Deckard formed a nonprofit corporation under Kentucky law but soon started operating it for profit.  After a couple of years of losses, he tried to elect S Corporation status for the entity so he could pass through and deduct those losses.  Judge Thornton held he was bound to the corporate form he had created under Kentucky law.  State law matters.  Details below the fold. 

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September 28, 2020 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (0)

Sunday, September 27, 2020

The Top Five New Tax Papers

There is quite a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new #1 paper and two new papers debuting on the list at #3 and #4:

  1. SSRN Logo (2018)[493 Downloads]  Ending Corporate Tax Avoidance and Tax Competition: A Plan to Collect the Tax Deficit of Multinationals, by Kimberly Clausing (UCLA), Emmanuel Saez (UC-Berkeley) & Gabriel Zucman (UC-Berkeley),
  2. [230 Downloads]  Economic Reality in EU VAT, by Ad van Doesum (Maastricht) & Frank Nellen (Maastricht)
  3. [216 Downloads]  The Rise of Cooperative Surplus Taxation, by Allison Christians (McGill) & Tarcisio Diniz Magalhaes (McGill)
  4. [183 Downloads]  Good Tax Governance: International Corporate Tax Planning and Corporate Social Responsibility – Does One Exclude the Other?, by Ave-Geidi Jallai (Tilburg)
  5. [145 Downloads]  Who Benefits from Place-Based Policies? Job Growth from Opportunity Zones, by Alina Arefeva (Wisconsin), Morris Davis (Rutgers), Andra Ghent (North Carolina) & Minseon Park (Wisconsin)

September 27, 2020 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink | Comments (0)

Saturday, September 26, 2020

Tax Consequences On The Sale Of Encumbered Property: Recourse v. Nonrecourse Debt

Kenneth Weil, Recourse and Nonrecourse Debt: What Are the Federal Income Tax Consequences When the Character of Debt Changes, 74 Tax Law. ___ (2020):

ABA Tax Lawyer (2019)When encumbered property is sold, the taxation of that sale is different if the sale involves recourse debt as opposed to non-recourse debt. This difference raises an intriguing question: when debt changes from recourse debt to non-recourse debt or vice versa, which rules will control? Examples of when debt changes from recourse to non-recourse or vice versa include bankruptcy discharges, foreclosures in a state with anti-deficiency statutes, some short sales in deficiency states, and the operation of Bankruptcy Code section 1111(b).

The Cottage Savings regulations, Regulation section 1.1001-3, have specific provisions designed to answer the question what happens when debt changes from recourse to non-recourse or vice versa.

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September 26, 2020 in ABA Tax Section, Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Friday, September 25, 2020

Weekly SSRN Tax Article Review And Roundup: Elkins Reviews Duff's General Anti-Avoidance Rules Revisited

This week, David Elkins (Netanya) reviews a recently posted work by David G. Duff (British Columbia), General Anti-Avoidance Rules Revisited, 68 Can. Tax. J. 579 (2020):

Elkins (2018)

It is no secret that tax legislation is extraordinary complex. Part of the reason is the subject matter itself. Economic reality and legal doctrines do not necessarily coincide, and when they do not then taxpayers frequently can exploit the mismatch to achieve beneficial tax results. One of the swords that administrators wield to combat this phenomenon is the general anti-avoidance rule (GAAR). The question of the limits to which taxpayers may go to lower their tax liability was originally – at least in common law countries – a product of judicial doctrine. Today many countries have codified the rule or at least certain key elements of it (the closest the United States has to a statutory GAAR is IRC §7701(o), which clarifies the judicial economic substance doctrine). However, whether codified or not, GAARs by their nature are problematic. They call upon the courts to ignore the express words of the statute to prevent tax avoidance. However, one would have to be extraordinarily naïve to believe that taxpayers do not routinely structure their affairs in response to tax rules. Thus the question of when it is legitimate to invoke a GAAR is not a simple one.

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September 25, 2020 in David Elkins, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Symposium On Ruth Mason's The Transformation Of International Tax

Symposium, Ruth Mason's The Transformation Of International Tax, 114 Am. J. Int'l L. 353 (2020):

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September 25, 2020 in Conferences, Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Thursday, September 24, 2020

Brunson: Using A Pigouvian Tax To Reduce Gun Violence

Sam Brunson (Loyola-Chicago), Paying For Gun Violence, 104 Minn. L. Rev. 605 (2019) (reviewed by David Elkins (Netanya) here):

Gun violence is an outsized problem in the United States. Between a culture that allows for relatively unconstrained firearm ownership and a constitutional provision that ensures that ownership will continue to be relatively unchecked, it has proven virtually impossible for politicians to address the problem of gun violence. And yet, gun violence costs the United States tens of billions of dollars or more annually. These tens of billions of dollars are negative externalities—costs that gun owners do not bear themselves, and thus that are imposed on the victims of violence and on taxpayers generally.

What can we do about these costs? One way to reduce them would be to pass meaningful laws, laws that would reduce the likelihood of gun violence. In light of both the culture and the Constitution of the United States, though, such legislation seems improbable. Lawmakers face significant limitations on their ability to regulate firearms directly. If they cannot prevent gun violence, though, they can at least cause gun owners to internalize the costs. Where direct regulation is difficult, they can turn instead to a Pigouvian tax.

In this Article, I propose a Pigouvian tax on firearms.

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September 24, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (15)

Zelenak: Examining The Internal Revenue Code For Disparate Racial Impacts

Lawrence Zelenak (Duke), Examining the Internal Revenue Code for Disparate Racial Impacts, 168 Tax Notes Fed. 1807 (Sept. 7, 2020):

Tax Notes FederalIn this article, Zelenak considers how a legislature committed to racial justice should respond to a convincing statistical demonstration that a particular provision of the Internal Revenue Code has disparate racial impacts. He says there are several steps between a demonstration that a provision (for example, the charitable deduction) disproportionately benefits white taxpayers in nominal terms, and the conclusion that it should be repealed or reformed to eliminate the disparate impact. He argues it is necessary (1) to establish a normative baseline from which the current provision departs, (2) to determine the race-based distribution of the ultimate benefits and burdens of the provision (as contrasted with the provision’s nominal impacts), and (3) to determine that a focus on the provision (rather than a broader or narrower focus) is at an appropriate level of analytical granularity. He concludes that the most important use of evidence of disparate racial impacts of tax provisions will almost certainly be as an argument for repealing or reforming a provision that constitutes bad tax policy even apart from its racial effects.

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September 24, 2020 in Scholarship, Tax, Tax Analysts, Tax Scholarship | Permalink | Comments (1)

Wednesday, September 23, 2020

Bearer-Friend Presents Should The IRS Know Your Race? The Challenge Of Colorblind Tax Data Virtually Today At UC-Irvine

Jeremy Bearer-Friend (George Washington) presents Should the IRS Know Your Race? The Challenge of Colorblind Tax Data, 73 Tax L. Rev. (2019), virtually at UC-Irvine today as part of its Tax Policy Colloquium Series hosted by Joshua Blank, Victor Fleischer, and Omri Marian:

Bearer Friend (2021)This Article draws from original archival sources to document a century of colorblindness in federal tax data. It traces the omission of race and ethnicity from IRS statistical publications since 1913, Joint Committee on Taxation publications since 1926, and Treasury Office of Tax Analysis publications since 1974. It shows how these omissions are exceptional relative to other areas of public policy where federal data on race and ethnicity are readily available, such as student achievement or healthcare exchange enrollments. It then evaluates the merits of colorblind tax data and argues that tax data should include race and ethnicity in order to meet goals of transparency, democracy, and equality. Colorblind tax data obscure racial inequality and prevent its remedy. Colorblind tax data also undermine the democratic accountability of tax policy. In fairness to the status quo practice of colorblindness by federal tax data institutions, this Article also considers whether the possible justifications for colorblind tax data should override principles of equality and transparency. It argues they should not.

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September 23, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (1)

Buchanan Presents Confessions Of A Recovering Economist Virtually Today At Oregon

Neil Buchanan (Florida) presents Confessions of a Recovering Economist virtually at Oregon today as part of its Tax Policy Colloquium Series hosted by Roberta Mann:

6a00d8341c4eab53ef0263e966931d200b-300wiTax law scholars, and legal scholars in general, have over the past few decades shown increasing deference to what is sometimes called "the economic approach to law." Interdisciplinary approaches to law are to be welcomed, of course, but the economic approach has crowded out other approaches, because far too many legal scholars (and economists) presume that economic analyses are correct, rigorous, and most importantly, objective. Whether or not those analyses are correct can only be determined on a case-by-case basis, while their supposed rigor confuses "doing a lot of math" with being precise in a meaningful way. Most importantly, however, these approaches are not and can never be objective. 

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September 23, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

SSRN Tax Professor Rankings

SSRN Logo (2018)SSRN has updated its monthly ranking of 750 American and international law school faculties and 3,000 law professors by (among other things) the number of paper downloads from the SSRN database.  Here is the new list (through September 1, 2020) of the Top 25 U.S. Tax Professors in two of the SSRN categories: all-time downloads and recent downloads (within the past 12 months):

    All-Time   Recent
1 Reuven Avi-Yonah (Michigan)  193,145 Reuven Avi-Yonah (Michigan) 7,710
2 Dan Shaviro (NYU) 121,322 Lily Batchelder (NYU) 5,852
3 Lily Batchelder (NYU) 117,881 David Kamin (NYU) 5,449
4 David Gamage (Indiana-Bloom.) 117,213 D. Dharmapala (Chicago) 4,390
5 Daniel Hemel (Chicago) 117,026 Ruth Mason (Virginia) 4,029
6 Darien Shanske (UC-Davis) 110,510 Daniel Hemel (Chicago) 3,826
7 David Kamin (NYU) 106,112 Bridget Crawford (Pace) 3,279
8 Cliff Fleming (BYU)    105,156 Diane Ring (Boston College) 3,029
9 Manoj Viswanathan (Hastings) 102,222 Shu-Yi Oei (Boston College)  2,934
10 Rebecca Kysar (Fordham) 101,100 Hugh Ault (Boston College) 2,753
11 Ari Glogower (Ohio State) 99,925 Richard Ainsworth (BU) 2,431
12 Michael Simkovic (USC) 44,685 Dan Shaviro (NYU) 2,380
13 D. Dharmapala (Chicago) 41,770 David Gamage (Indiana-Bloom.) 2,308
14 Paul Caron (Pepperdine) 37,327 Margaret Ryznar (Indiana-Indy)    2,205
15 Louis Kaplow (Harvard) 33,605 Darien Shanske (UC-Davis)  1,877
16 Richard Ainsworth (BU) 30,545 Brad Borden (Brooklyn) 1,833
17 Ed Kleinbard (USC) 27,098 Robert Sitkoff (Harvard) 1,785
18 Vic Fleischer (UC-Irvine) 26,324 Louis Kaplow (Harvard) 1,565
19 Jim Hines (Michigan) 25,261 Manoj Viswanathan (Hastings) 1,545
20 Brad Borden (Brooklyn) 25,016 Paul Caron (Pepperdine)   1,500
21 Bridget Crawford (Pace) 24,785 Cliff Fleming (BYU) 1,438
22 Robert Sitkoff (Harvard) 24,684 Ari Glogower (Ohio State) 1,407
23 Ted Seto (Loyola-L.A.) 24,496 Katie Pratt (Loyola-L.A.) 1,343
24 Gladriel Shobe (BYU) 24,206 Michael Simkovic (USC) 1,315
25 Richard Kaplan (Illinois) 23,805 Rebecca Kysar (Fordham) 1,223

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September 23, 2020 in Scholarship, Tax, Tax Prof Rankings, Tax Scholarship | Permalink | Comments (0)

Pittsburgh Tax Review Publishes New Issue

Pittsburgh Tax Review (2017)The Pittsburgh Tax Review has published Vol. 17, No. 1 (2020):

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September 23, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Raskolnikov: Distributional Arguments, In Reverse

Alex Raskolnikov (Columbia), Distributional Arguments, In Reverse, 105 Minn. L. Rev. ___ (2020):

What should the government do about the distribution of resources and outcomes in the society? Two arguments have shaped academic debates about this question for several decades. The first argument states that economic regulation should focus on efficiency alone, leaving distributional considerations for the tax-and-transfer system. The second argument objects to government assistance for people unintentionally harmed by legal reforms. Taken together, the two arguments impose major restrictions on the range of possible distributional policies.

This Article contends that a growing body of research in the economics of trade, immigration, industrial organization, labor, and environmental regulation reveals that the core assumptions underlying the two distributional arguments do not hold. Moreover, once these assumptions are changed to reflect reality, the analytical machinery underlying the arguments goes in reverse: The conclusions become not merely indeterminate but opposite of those originally advanced.

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September 23, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Tuesday, September 22, 2020

Kleven Presents The EITC And The Extensive Margin Virtually Today At NYU

Henrik Kleven (Princeton) presents The EITC and the Extensive Margin: A Reappraisal virtually at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

Kleven_henrik2This paper reconsiders the impact of the Earned Income Tax Credit (EITC) on labor supply at the extensive margin. I investigate every EITC reform at the state and federal level since the inception of the policy in 1975. Based on event studies comparing single women with and without children, or comparing single mothers with different numbers of children, I show that the only EITC reform associated with clear employment increases is the expansion enacted in 1993. The employment increases in the mid-late nineties are very large, but they are influenced by the confounding effects of welfare reform and a booming macroeconomy. Based on different approaches that exploit variation in these confounders across household type, space and time, I show that the employment effects align closely with exposure to welfare reform and the business cycle. Single mothers who were unaffected by welfare reform (but eligible for the EITC) did not respond. Overall and contrary to consensus, the case for sizable extensive margin effects of the EITC is fragile. I highlight the presence of informational frictions, widely documented in the literature, as a natural explanation for the absence of extensive margin responses.

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September 22, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Polsky Presents Taxing Buybacks Virtually Today At UC-Hastings

Gregg Polsky (Georgia) presents Taxing Buybacks (with Daniel Hemel (Chicago)) virtually at UC-Hastings today as part of its Tax Speakers Series hosted by Heather Field and Manoj Viswanathan:

PolskyHead_0-2-262x300A recent rise in the volume of corporate share repurchases has prompted calls for changes to the rules governing stock buybacks. These calls for reform are animated by concerns that buybacks enrich corporate executives at the expense of productive investment. This emerging anti-buyback movement includes presidential candidates as well as academics and Republicans as well as Democrats. The primary focus of buyback critics has been on securities law changes to deter repurchases, with only passing mention of potential tax law solutions.

This article critically examines the policy arguments against buybacks and arrives at a mixed verdict. On the one hand, claims that buybacks reduce corporate investment and inappropriately reward executives turn out to be poorly supported. On the other hand, the article identifies legitimate tax-related concerns about the rising buyback tide. Buybacks exacerbate two of the U.S. tax system’s most severe flaws. The first is the “Mark Zuckerberg problem”: the effective nontaxation of firm founders on what is essentially labor income. The second is what we call the “Panama Papers problem”: the use of U.S. capital markets by investors in offshore tax havens to generate tax-free returns.

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September 22, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Pittsburgh Tax Review Publishes New Issue

Pittsburgh Tax Review (2017)The Pittsburgh Tax Review has published Vol. 17, No. 1 (2019):

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September 22, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Monday, September 21, 2020

Gravelle Presents Sharing the Wealth: How To Tax The Rich Virtually Today At Loyola-L.A.

Jane G. Gravelle (Congressional Research Service) presents Sharing the Wealth: How to Tax the Rich virtually today at Loyola-L.A. today as part of its Tax Policy Colloquium Series hosted by Katie Pratt and Ted Seto:

GravelleThis paper considers methods for taxing income of the affluent. Much of this income is unrealized capital gains that escapes tax. Conventional individual income taxes changes cannot capture this income and corporate taxes cannot target the wealthy. Other options are estate and gift taxes, taxation of gains on an accrual basis, and a wealth tax. Accrual taxation of capital gains most closely captures untaxed income, can be targeted to the wealthy, and appears to be feasible. If wealth and accrual taxation are deemed too difficult, a combination of conventional changes and taxing gains at death are options. ...

Summing Up
At the heart of the problem of taxing the rich is that the individual income tax does not reach much of the income of the extremely affluent. Each of the options for doing so has advantages and limitations. Individual income tax changes tax only income already subject to tax. There are significant problems surrounding a wealth tax and many barriers to be overcome; a wealth tax also increases taxes on assets already subject to tax in many cases.

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September 21, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (2)

Lesson From The Tax Court: Receipts Are Not Enough

Tax Court (2020)In Anna M. Armstrong v. Commissioner, T.C. Sum. Op. 2020-26 (Sept. 17, 2020), Judge Panuthos teaches that substantiation does not just mean showing the amount of an expense; it means showing entitlement to deduct that expense.  It's an exemplary lesson in substantiation, including a review of the Cohan doctrine, and of the home office deduction.  Along the way, we learn just how tax practitioners can give value to their clients: teach them that receipts are not enough.

At first glance, this case might seem unimportant because it concerns below-the-line miscellaneous itemized deductions for unreimbursed employee expenses.  Section 67(g) totally disallows those types of deductions for tax years 2018-2025.

But I think this opinion is worth your time.

First, COVID.  Congress might actually re-authorize the deduction of unreimbursed employee expenses for tax year 2020 as part of the next COVID relief bill.  I do not have any inside knowledge on this, but some in Congress might view reviving unreimbursed employee expense deductions as a benefit to taxpayers forced to work from home during COVID shutdowns.  Others might believe that Congress gave enough relief in the Economic Impact Payments.  And this tax benefit is one that invites conflict and, hence, litigation.  Regardless of what Congress does, those taxpayers who are independent contractors continue to qualify for a home office deduction and this opinion teaches how to substantiate that use.  I give a couple of COVID thoughts at the end of the post.

Second, Judge Panuthos gives a wonderfully compact, lucid explanation of what taxpayers and their representatives need to know about substantiation.  I repeatedly tell my students that when you want to understand the law, find a good trial court opinion that explains it.  This is one of those opinions.  It’s a great teaching case.

Finally, some readers might find current utility from these lessons because 2017 and possibly 2016 are still open years.  Besides, taxpayers frequently stumble over the substantiation rules, especially for establishing a home office, whether or not they are taking deductions above or below the line.  For all those reasons I invite you to continue reading....

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September 21, 2020 in Bryan Camp, New Cases, Scholarship, Tax, Tax Scholarship | Permalink | Comments (2)

Sunday, September 20, 2020

The Top Five New Tax Papers

There is quite a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with two new papers debuting on the list at #4 and #5:

  1. SSRN Logo (2018)[495 Downloads]  Policy Options for Taxing the Rich, by Lily Batchelder (NYU) & David Kamin (NYU)
  2. [493 Downloads]  Ending Corporate Tax Avoidance and Tax Competition: A Plan to Collect the Tax Deficit of Multinationals, by Kimberly Clausing (UCLA), Emmanuel Saez (UC-Berkeley) & Gabriel Zucman (UC-Berkeley),
  3. [477 Downloads]  Rethinking Tax for the Digital Economy After COVID-19, by Tarcisio Diniz Magalhaes (McGill) & Allison Christians (McGill) (reviewed by Young Ran (Christine) Kim (Utah) here)
  4. [219 Downloads]  Economic Reality in EU VAT, by Ad van Doesum (Maastricht) & Frank Nellen (Maastricht)
  5. [137 Downloads]  Who Benefits from Place-Based Policies? Job Growth from Opportunity Zones, by Alina Arefeva (Wisconsin), Morris Davis (Rutgers), Andra Ghent (North Carolina) & Minseon Park (Wisconsin)

September 20, 2020 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink | Comments (0)

Saturday, September 19, 2020

Taxation As A Barrier To Blockchain Innovation

Michael Chatham (Radford University) & Thomas K. Duncan (Radford University), Taxation as a Barrier to Blockchain Innovation:

BlockchainThough it is not the only cryptocurrency in circulation, Bitcoin has been one of the dominant and more highly valued digital currencies in the blockchain family. The IRS recently decided to treat Bitcoin and all other cryptocurrencies as property, thus causing ownership interests in these cryptocurrencies to generate a taxable transaction any time they are sold or traded for another good or service. We argue that taxation of cryptocurrencies and the recordkeeping necessities that come with it serve to inhibit the innovation in and growth of what could be an extremely valuable new commodity, the blockchain itself. We offer alternative strategies to mitigate the potential effects of these types of regulatory tax policies.

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September 19, 2020 in Scholarship, Tax | Permalink | Comments (0)

Friday, September 18, 2020

Weekly SSRN Tax Article Review And Roundup: Speck Reviews Brunson's Georgia, The IRS, And The KKK

This week, Sloan Speck (Colorado) reviews a new work by Samuel D. Brunson (Loyola Chicago), Addressing Hate: Georgia, the IRS, and the Ku Klux Klan.

Speck (2017)

The Ku Klux Klan’s second iteration began at a time of transformation for the American fiscal state. As economists and politicians reoriented the federal tax system towards progressive income taxation, white ethnonationalists consolidated and organized around false and pernicious understandings of the historic hate group. In 1915, a new Klan emerged, claiming as many as four million members at its peak in 1924. As Sam Brunson argues in his important new article, Addressing Hate: Georgia, the IRS, and the Ku Klux Klan, the Bureau of Internal Revenue and the State of Georgia each played crucial roles in both facilitating the rise of the second Klan and hastening its formal demise in the mid-1940s. Brunson’s valuable work resonates in our current political climate, as contemporary supremacist groups claim privileges under state corporate law and the Internal Revenue Code. How we address these groups today should be informed by the important history that Brunson uncovers.

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September 18, 2020 in Scholarship, Sloan Speck, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Shurtz: Tax, Class, Women, And Elder Care

Nancy E. Shurtz (Oregon), Tax, Class, Women, and Elder Care, 43 Seattle U. L. Rev. 225 (2019):

Elder care is a large and growing sector in the comprehensive health care system in the United States. It is an issue of particular importance to women because women live longer than men, have higher incidences of degenerative ailments, and are more likely to be institutionalized. Women also face greater financial challenges in funding their health care maintenance. Whereas wealthy individuals enjoy a multitude of elder care choices and can even self-insure to avoid the steep expense and risk of long-term care insurance, most women do not possess the resources to exercise such a wide degree of choice. Middle-income women increasingly feel the squeeze of concurrent rises in medical and housing costs and must often engage in contingency Medicaid planning. Low-income women, particularly those who are single, living in rural areas, or members of an ethnic minority, have few viable health care options and are the most likely to be herded into institutional care facilities. Nursing homes carry high costs and often do not offer high-level or personalized care. Current tax policy, however, is structured to favor institutional care. Conspicuously lacking are adequate subsidies to facilitate home-based options and meaningful support for caregiving labors, both key factors that contribute to the dearth of care options for our poorest citizens. The tax system is in dire need of modification to address this exploding elder care crisis, requiring explicit acknowledgment of the need to generate revenues dedicated to fulfilling our public commitment to the basic welfare of this rapidly growing cohort of the American population.

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September 18, 2020 in Legal Education, Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Thursday, September 17, 2020

Bi-Annual Taxes: A Simple Solution to Rising Tax Non-Compliance, Shrinking IRS Budgets, And Increasing Taxpayer Burden

Jeffrey A. Dubin (MIT) & Emma Cockerell (USC), Bi-Annual Taxes – A Simple Solution to Rising Tax Non-Compliance, Shrinking IRS Budgets, and Increasing Taxpayer Burden:

Each year, individual tax non-compliance results in billions of dollars of lost tax revenue. While the Internal Revenue Service (IRS) conducts examinations of select returns, the audit rate has fallen precipitously in past decades.

MIT 3

Meanwhile, the number of individual returns has grown and return complexity has risen. Individuals face a dauntingly complex tax code that requires the assistance of paid preparers. More than ever, the IRS experiences greater demands for assistance from taxpayers but fewer resources to fulfill these demands. Instead of the oft-proposed IRS budget increase, we propose a simple and pragmatic, but transformative, solution: the bi-annual filing and collection of taxes, which would minimize taxpayer and paperwork burdens, free up IRS funding, and result in a de facto doubling of the audit rate.

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September 17, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (5)

Brunson: Addressing Hate — Georgia, The IRS, And The KKK

Sam Brunson (Loyola-Chicago), Addressing Hate: Georgia, the IRS, and the Ku Klux Klan:

In 1944, the Ku Klux Klan officially suspended its operations. Two years later, it had entirely ended. In part this was the inevitable result of a decade of declining influence and membership. In part, though, it was the result of actions by the federal government and the state of Georgia.

In 1916 the Ku Klux Klan incorporated as a Georgia fraternal organization, following a model of the Masons and other fraternal organizations. It also claimed to be a tax-exempt fraternal beneficiary society under the new federal income tax. These legal statuses provided the Klan with legal rights and benefits and also shrouded it in a cloak of respectability: it could claim that it was not merely a terroristic white supremacist group, but that it provided fraternal benefits to its members and the surrounding community.

Its incorporation and tax status provided it with benefits, it also imposed obligations on the organization. The Klan ultimately proved incapable of meeting these requirements. It violated the terms of its corporate charter and of tax exemption as a fraternal beneficiary society. The Bureau of Internal Revenue assessed a $685,305 tax on the Klan and, when the Klan did not pay, filed a lien. The state of Georgia in turn revoked its corporate charter. While these moves did not cause the second Klan’s death, they did seal its death.

This Article relates the story of the Klan’s corporate and tax statuses.

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September 17, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (1)

Shanske & Gamage: How The Federal Reserve Should Help States And Localities

Darien Shanske (UC-Davis) & David Gamage (Indiana), How the Federal Reserve Should Help States and Localities Right Now, 96 Tax Notes State 765 (May 11, 2020):

This essay explains how and why the Federal Reserve could support state and local governments during the COVID-19 emergency to prevent drastic spending cuts.

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September 17, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Wednesday, September 16, 2020

Repetti Presents The Appropriate Roles For Equity And Efficiency In A Progressive Income Tax Virtually Today At Oregon

Jim Repetti (Boston College) presents The Appropriate Roles for Equity and Efficiency in a Progressive Income Tax, 24 Fla. Tax Rev. ___ (2020), virtually at Oregon today as part of its Tax Policy Colloquium Series hosted by Roberta Mann:

ProfileImage.imgIncreased focus on economic efficiency in formulating tax policy, at the expense of achieving equity, has resulted in decreased rate progressivity in our individual income tax. This decrease has exacerbated inequality.

There are several explanations for the intense focus on efficiency and reduced emphasis on equity. Predictions of efficiency gains from low individual income tax rates appear more certain than equity gains from progressive tax rates. Efficiency gains seem measurable, while equity gains appear intangible and unquantifiable. In addition, distributive justice, which underlies and shapes tax equity, exists in many abstract forms, some of which may not require progressive tax rates. 

This article argues, however, that the emphasis on efficiency is misplaced. Inequality imposes measurable costs on the health, social wellbeing and intergenerational mobility of our citizens, as well as on our democratic process, which are corroborated by significant empirical analysis.

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September 16, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Ordower Posts Three Tax Papers On SSRN

Henry Ordower (St. Louis), Capital, an Elusive Tax Object and Impediment to Sustainable Taxation, 24 Fla. Tax Rev. ___ (2021):

Florida Tax Review (2019)Sustainable taxation requires stability and predictability. Sustainable taxation is a tax or taxes that collect sufficient revenue to support the governmental goods and services the society needs and wants. The taxes must provide for 1) even-handedness — something akin to horizontal equity, 2) distributional fairness — a concept emerging from notions of vertical equity, 3) transparency in application so that the populace understands and accepts the tax and the need for it and 4) collection mechanisms that do not favor some societal groups, especially those with resources to secure creative tax advisors, over others who lack the resources. Narrow base taxes — fuel, alcohol, tobacco — cannot meet these criteria and the broad base taxes currently applicable — value added, payroll and income — also fail to meet one or more of the criteria. While specialized taxes like environmental taxes and sin taxes (alcohol, tobacco) serve useful regulatory functions and may achieve their behavioral objectives in part, they do so primarily by increasing the cost of engaging in the undesirable behavior and pricing some actors out of the activity. Using a pricing rather than a direct regulatory mechanism, the specialized taxes change the conversation from social rejection of the behavior to acceptance as long as the actor is willing and able to pay the high price. Is it all right to pollute if one pays to do so? Direct regulation might prove less regressive and less likely to be viewed as simply a matter of price and more as a matter of societal mainstream and commitment to addressing a problem.

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September 16, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

How Well-Targeted Are Payroll Tax Cuts As A Response To COVID-19? Evidence From China

Wei Cui, Jeffrey Hicks & Max B. Norton (British Columbia), How Well-Targeted Are Payroll Tax Cuts as a Response to COVID-19? Evidence from China:

Numerous countries cut payroll taxes in response to economic downturns caused by COVID-19. This includes China, which completely exempted most firms from making social insurance (SI) contributions, resulting in an average tax cut of 21 percentage points on formal labor costs and approximately 20% of total tax remittances made by firms. We use novel data on 900,000 firms in one Chinese province to document new facts about the structure of SI in China and evaluate payroll tax cuts as a COVID-19 relief measure. We calculate that labor informality causes 54% of tax-registered firms---representing 24% of aggregate economic activity---to receive no benefits. Labor formality also increases with firm size, further skewing the benefit of payroll tax cuts towards large firms.

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September 16, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (1)

Tuesday, September 15, 2020

Kern Presents Illusions Of Justice In International Taxation Virtually Today At NYU

Adam Kern (Ph.D. 2021, Princeton) presents Illusions of Justice in International Taxation virtually at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

0I criticize a common way of thinking about justice in international taxation, and I propose an alternative. My critical target is a claim I call the Capture Principle. Common ground among many government officials, leading tax scholars, and several of the few philosophers who have thought about international taxation, the Capture Principle asserts that each state should have rights to tax income generated from economic activities within its territory, rights whose value scales in proportion to the income generated from the hosted economic activities.

The Capture Principle appears to embody an ideal of reciprocity. I argue that this appearance is illusory. I examine three arguments that connect those two ideas, and I show that each fails on its own terms. Even if we ought not to free-ride off others, ought to pay compensation for the burdens we place on others’ public sectors, ought to reward people for the surplus value that they create— the Capture Principle does not follow.

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September 15, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Stetson Competition Generates Tax Solutions To Address Climate Change

New Competition Generates Tax Solutions to Address Climate Change:

Stetson Logo (2020)Stetson University College of Law launched a new competition to galvanize students to develop innovative tax law policies that could fund solutions for sea level rise.

Though tax policy might not be the first discipline to come to mind in which to seek tools to combat climate change, attorney and author Richard O. “Dick” Jacobs felt confident Stetson students, if given the challenge, could mine it to great effect. Rising sea levels are a pressing issue for Florida’s future, and Jacobs thought funding a competition would jump start a conversation by focusing on tax policy solutions to help address the problem.

And so The Stetson Environmental Tax Policy Writing Competition: Tax Policy Solutions to Address Sea Level Rise was born. Students submitted their ideas in late spring, and a committee of tax and environmental lawyers judged the competition using the following criteria: (1) breadth and depth of analysis and sources, (2) creativity and originality, (3) objectivity and legal accuracy, (4) effectiveness of writing style, (5) practicality for addressing the issue, and (6) compliance with the contest rules.

Submissions could include proposed changes to the Florida Constitution and to Florida tax and regulatory law. The first and second place winners split a $1,000 cash prize. The winners of the inaugural competition were:

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September 15, 2020 in Legal Ed News, Legal Education, Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Oei & Ring: When Data Comes Home — Next Steps In International Taxation's Information Revolution

Shu-Yi Oei (Boston College) & Diane M. Ring (Boston College), When Data Comes Home: Next Steps in International Taxation's Information Revolution, 66 McGill L.J. ___ (2020):

Over the last decade, there has been a revolution in cross-border tax information exchange and reporting. While this dramatic shift was the product of multiple forces and events, a fundamental reality is that politics, technology, and law intersected to drive the shift to the point where nation-states will now transmit and receive from each other significant ongoing flows of taxpayer information. States can now expect to accumulate large stashes of data on cross-border income, assets, and activities on a scale and level of comprehensiveness unmatched by previous information exchange regimes.

This article examines the pressing follow-up question of how this data will be used and what issues nation-states will confront when data comes home.

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September 15, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

2020 IFA International Tax Student Writing Competition (Sept. 30 Deadline)

IFA Logo (2015)The deadline in the International Fiscal Association's 2020 International Tax Student Writing Competition is September 30:

2020 IFA International Tax Student Writing Competition:
Subject: Any topic relating to U.S. taxation of income from international activities, including taxation under U.S. tax treaties.
Open to: All students during the 2019-20 academic year (including independent study and summer 2020 school courses) pursuing a graduate degree (J.D., L.L.M., S.J.D., M.S.T., MTA, Masters of Taxation, or similar program). Any appropriate papers written in fall 2019 or spring and summer 2020.
Publication: The winning author will be entitled to publish his/her article in the Tax Management International Journal, which is produced by Bloomberg BNA.
Submission DeadlineSeptember 30, 2020.
Prize:  $2,000 cash, plus expenses-paid invitation to the IFA USA Branch Annual Meeting in Chicago on April 22-23, 2021.

Here are the recent winners:

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September 15, 2020 in Legal Ed News, Legal Education, Scholarship, Tax, Tax Scholarship, Teaching | Permalink | Comments (0)

Monday, September 14, 2020

Christians and Diniz Magalhães Present The Rise Of Cooperative Surplus Taxation Virtually Today At Loyola-L.A.

Allison Christians (McGill) and Dr. Tarsício Diniz Magalhães (McGill) presents The Rise of Cooperative Surplus Taxation virtually today at Loyola-L.A. today as part of its Tax Policy Colloquium Series hosted by Katie Pratt and Ted Seto:

ChristiansThe world’s tax policy leaders are currently engaged in debate over who should tax the income streams produced with the help of cross-border regulatory coordination — the cooperative surplus over the gains that, in a counterfactual world, would be available if investments were confined to the domestic economy. To the extent there ever was a coherent relationship between consensus tax policy norms and the distribution of cooperative surplus, that relationship is now hopelessly skewed by real life factors, chief among them the rapid advancement of innovative technology that transcends physical boundaries of all kinds. The growing dissatisfaction of those on the wrong side of the skew had already initiated a rise in innovative ways to tax cooperative surplus when COVID-19 struck, significantly increasing the stakes for taxation and prompting yet more reform proposals. There are now at least fourteen strategies in play, each drawing varying levels of scrutiny, buy-in, and pushback.

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September 14, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Hemel Presents Clarifying The Role Of Redistribution In Cost-Benefit Analysis Virtually Today In California

Daniel Hemel (Chicago) presents Clarifying the Role of Redistribution in Cost-Benefit Analysis virtually today as part of the San Diego-Davis-Hastings Tax Law Speaker Series:

UnnamedCost-benefit analysis is the standard method for policy evaluation across U.S. federal executive-branch agencies. Cost-benefit analysis, as traditionally implemented by federal agencies, does not explicitly account for changes in income redistribution or the resource costs of income redistribution. Rising concern about income inequality—including but not limited to income inequality across racial and ethnic groups—has focused new attention on this feature of cost-benefit analysis and has generated renewed criticism of the redistribution-neutral approach.

This paper seeks to clarify the role of income redistribution in agency cost-benefit analysis and articulate conditions under which regulatory evaluation should account for distributive consequences. In particular, it seeks to provide concrete guidance to a hypothetical incoming presidential administration regarding top-down policies for regulatory evaluation across the executive branch. Part I distinguishes among traditional (redistribution-neutral) cost-benefit analysis, wealth maximization, and social welfare analysis. It explains why traditional redistribution-neutral cost-benefit analysis and social welfare analysis are potentially justifiable methods for policy evaluation but wealth maximization is not. Part II considers three justifications for the traditional redistribution-neutral approach.

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September 14, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Lesson From The Tax Court: Rejected e-Filed Return Starts The SOL On Assessment

Tax Court (2020)Perspective is important.  As we regularly see in politics and protests, different groups have different points of view.  In tax law, disputes between taxpayers and the IRS quite often stem from different perspectives on the law.  Courts are called upon to adopt one or the other perspective in resolving the dispute.

In Robin J. Fowler v. Commissioner, 155 T.C. No. 7 (Sept. 9, 2020), Judge Greaves adopts a strongly taxpayer perspective of the law.  He holds that even though the IRS rejected an e-filed return the return still triggered the 3-year limitation period on assessment.  This elevates the taxpayer perspective on the importance of the limitation period over the IRS perspective on the importance of being able to process a return.

The decision may be a consequential one, both for taxpayers and the IRS.  And not just because it's a fully reviewed opinion — a "we really mean it" opinion.  It may be consequential because of its ripple effects.  For example, will taxpayers whose e-filed returns are rejected now escape a late filing penalty if they either fail to resubmit or resubmit much later?  Further, both the IRS and taxpayers will now need to figure out whether the Court’s opinion applies to all e-file rejections or just certain ones and, if so, which ones.  Hello litigation.

If the IRS appeals the decision, a reviewing court may well take the IRS perspective.  After all, the Supreme Court has said, more than once, that “limitations statutes barring the collection of taxes otherwise due and unpaid are strictly construed in favor of the Government.” Bufferd v. Commissioner, 506 U.S. 523, 528 (1993).  That perspective, however, raises its own set of problems.  More on that below the fold.

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September 14, 2020 in Bryan Camp, New Cases, Scholarship, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (2)

Sunday, September 13, 2020

The Top Five New Tax Papers

This week's list of the Top 5 Recent Tax Paper Downloads is the same as last week's list:

  1. SSRN Logo (2018)[487 Downloads]  Policy Options for Taxing the Rich, by Lily Batchelder (NYU) & David Kamin (NYU)
  2. [469 Downloads]  Ending Corporate Tax Avoidance and Tax Competition: A Plan to Collect the Tax Deficit of Multinationals, by Kimberly Clausing (UCLA), Emmanuel Saez (UC-Berkeley) & Gabriel Zucman (UC-Berkeley),
  3. [429 Downloads]  Rethinking Tax for the Digital Economy After COVID-19, by Tarcisio Diniz Magalhaes (McGill) & Allison Christians (McGill) (reviewed by Young Ran (Christine) Kim (Utah) here)
  4. [247 Downloads]  The Effect of U.S. Tax Reform on the Tax Burdens of U.S. Domestic and Multinational Corporations, by Scott Dyreng (Duke), Fabio Gaertner (Wisconsin), Jeffrey Hoopes (North Carolina) & Mary Vernon (Wisconsin)
  5. [242 Downloads]  What Are Minimum Taxes, and Why Might One Favor or Disfavor Them?, by Daniel Shaviro (NYU)

September 13, 2020 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink | Comments (0)

Saturday, September 12, 2020

Zelinsky Posts Two Tax Papers On SSRN

Edward Zelinky (Cardozo), New York's Ill-Advised Taxation of Nonresidents During COVID-19, 167 Tax Notes Fed. 1001 (May 25, 2020):

SSRN Logo (2018)For 2020, New York should tax neither the incomes of nonresident telecommuters nor the incomes of the volunteers who came from across the country to help New York confront the COVID-19 emergency.If New York will not act in this sensible fashion, Congress should. In the next round of coronavirus legislation, Congress can prohibit the states from taxing, for the duration of the coronavirus emergency, the incomes of nonresident telecommuters and out-of-state medical volunteers.

Edward Zelinky (Cardozo), CalSavers and ERISA Redux: The District Court’s Second Opinion in Howard Jarvis Taxpayers Association v. The California Secure Choice Retirement Savings Program, NYU Rev. Employee Benefits & Executive Compensation (2020):

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September 12, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Friday, September 11, 2020

Weekly SSRN Tax Article Review And Roundup: Holderness Reviews Walker's Tax Complexity And Technology

This week, Hayes Holderness (Richmond) reviews David I. Walker (Boston University), Tax Complexity and Technology:

Holderness (2017)Tax preparation platforms like TurboTax and TaxAct offer taxpayers a (relatively) easy way to complete and file their tax returns. Tax preparation businesses like H&R Block similarly ease the burden on taxpayers of completing and filing tax returns; those businesses also use technology to provide their services. Cumulatively, over 90% of individual taxpayers do their taxes with the help of these platforms or businesses, as opposed to filling out the returns themselves. Technology appears to be a tax simplification salve for the vast majority of individual taxpayers.

Not quite so fast, argues David Walker, in his draft article, Tax Complexity and Technology. While technology has undeniably simplified the return process for many, it has also helped mask the inner workings of the tax laws. Tax preparation platforms and businesses can operate like “black box” algorithms: just plug in the data and get a nice round number; don’t worry about how the number is reached. These black boxes allow for the complexity of the tax laws to grow.

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September 11, 2020 in Hayes Holderness, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Avi-Yonah Presents A New Corporate Tax Virtually Today At Florida

Revuen S. Avi-Yonah (Michigan) presents A New Corporate Tax, 99 Tax Notes Int’l 497 (July 27, 2020), virtually today at Florida as part of its Tax Colloquium Series:

'aviyonahThe US corporate tax is over 100 years old, and many academic observers have doubted its value. The standard explanation for why we tax corporations is that it is an indirect tax on shareholders, but that is not a valid reason to have a corporate tax because (a) shareholders can be taxed directly and (b) many shareholders are tax exempt and should not be taxed at all. However, there is another reason to tax corporations, which was in fact the original rationale why we adopted the corporate tax in 1909: To limit the power of large monopolistic corporations and regulate their activities. If that is the reason for the corporate tax, the US should have a different tax structure than the current 21% flat tax. 

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September 11, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (1)

Layser: The Pro-Gentrification Origins Of Place-Based Investment Tax Incentives

Michelle Layser (Illinois), The Pro-Gentrification Origins of Place-Based Investment Tax Incentives and a Path toward Community Oriented Reform, 2019 Wis. L. Rev. 745 (reviewed by Ezra Rosser (American) here):

Place-based investment tax incentives, which encourage taxpayers to invest in poor areas, constitute a particularly controversial, yet undertheorized, category of tax laws. The central problem presented by current place-based investment tax incentives is a contradiction between rhetoric and reality. They are presented as laws that benefit low-income communities, yet the dominant types of place-based investment tax incentives are not designed for this purpose. Understanding the reasons for this disconnect is key to assessing the limits and potential of place-based investment tax incentives as anti-poverty tools. By tracing the development of place-based investment tax incentives to their pro-gentrification origins, this Article argues that what many anti-poverty advocates view as a flaw — the lack of safeguards for poor communities that allegedly opens the door to abuses — is, in fact, a feature of most current place-based investment tax incentives.

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September 11, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Thursday, September 10, 2020

Kahn & Kahn: Tax And Cross-Collateralized Nonrecourse Liability

Douglas A. Kahn (Michigan) & Jeffrey H. Kahn (Florida State), Tax and Cross-Collateralized Nonrecourse Liability, 24 Fla. Tax Rev. __ (2021):

Florida Tax Review (2019)This article explores the tax treatment of cross-collateral nonrecourse debt. When using the term cross-collateral debt, we are referring to nonrecourse debt that is connected with more than one piece of property. While tax issues concerning cross-collateralized properties can arise in several circumstances, the focus of this article is on the tax treatment of a transfer of property subject to a cross-collateralized nonrecourse liability to a controlled corporation in exchange for stock that qualifies for some or all nonrecognition under § 351. The article also discusses two other tax issues involving cross-collateralized nonrecourse liability – namely, cancellation of debt and determination of basis issues.

September 10, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Christians & Magalhaes: The Rise Of Cooperative Surplus Taxation

Allison Christians (McGill) & Tarcisio Diniz Magalhaes (McGill), The Rise of Cooperative Surplus Taxation:

The world’s tax policy leaders are currently engaged in debate over who should tax the income streams produced with the help of cross-border regulatory coordination—the cooperative surplus over the gains that, in a counterfactual world, would be available if investments were confined to the domestic economy. To the extent there ever was a coherent relationship between consensus tax policy norms and the distribution of cooperative surplus, that relationship is now hopelessly skewed by real life factors, chief among them the rapid advancement of innovative technology that transcends physical boundaries of all kinds. The growing dissatisfaction of those on the wrong side of the skew had already initiated a rise in innovative ways to tax cooperative surplus when COVID-19 struck, significantly increasing the stakes for taxation and prompting yet more reform proposals. There are now at least fourteen strategies in play, each drawing varying levels of scrutiny, buy-in, and pushback.

Continue reading

September 10, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Walker: Tax Complexity And Technology

David I. Walker (Boston University), Tax Complexity and Technology:

The federal income tax code has become increasingly complex over time with the implication that many taxpayers no longer understand the connection between their life decisions and their taxes. Some commentators have suggested that increasing computational complexity may be attributable in part to the proliferation of tax preparation software that renders such complexity manageable at filing time, but otherwise does nothing to mitigate the “black box” nature of the tax system. While such complexity and opacity undercut explicit incentives embedded in the Code, make planning more difficult, and undermine political accountability for taxes, they may also reduce the inefficient distortion or deadweight loss of the income tax, particularly with respect to higher-income taxpayers.

This Article argues that technology represents a potential response to tax complexity and opacity as well as a contributing factor.

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September 10, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Wednesday, September 9, 2020

Piketty Presents Unequal Societies: Slavery, Abolition, And Long-Run Consequences Virtually Today At UC-Berkeley

Thomas Piketty (Paris School of Economics) presents Unequal Societies: Slavery, Abolition, and Long-Run Consequences, in Capital and Ideology (Harvard University Press 2020) virtually at UC-Berkeley today as part of its Robert D. Burch Center for Tax Policy and Public Finance Seminar Series:

Piketty 4Thomas Piketty’s bestselling Capital in the Twenty-First Century galvanized global debate about inequality. In this audacious follow-up, Piketty challenges us to revolutionize how we think about politics, ideology, and history. He exposes the ideas that have sustained inequality for the past millennium, reveals why the shallow politics of right and left are failing us today, and outlines the structure of a fairer economic system.

Our economy, Piketty observes, is not a natural fact. Markets, profits, and capital are all historical constructs that depend on choices. Piketty explores the material and ideological interactions of conflicting social groups that have given us slavery, serfdom, colonialism, communism, and hypercapitalism, shaping the lives of billions. He concludes that the great driver of human progress over the centuries has been the struggle for equality and education and not, as often argued, the assertion of property rights or the pursuit of stability. The new era of extreme inequality that has derailed that progress since the 1980s, he shows, is partly a reaction against communism, but it is also the fruit of ignorance, intellectual specialization, and our drift toward the dead-end politics of identity.

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September 9, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (1)

Tuesday, September 8, 2020

Sarin Presents Understanding The Revenue Potential Of Tax Compliance Investments Virtually Today At NYU

Natasha Sarin (Pennsylvania) presents Understanding the Revenue Potential of Tax Compliance Investments virtually at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

NsarinIn a July 2020 report, the Congressional Budget Office estimated that modest investments in the IRS would generate somewhere between $60 and $100 billion in additional revenue over a decade. This is qualitatively correct. But quantitatively, the revenue potential is much more significant than the CBO report suggests. We highlight five reasons for the CBO’s underestimation: 1) the scale of the investment in the IRS contemplated is modest and far short of sufficient even to return the IRS budget to 2011 levels; 2) the CBO contemplates a limited range of interventions, excluding entirely progress on information reporting and technological advancements; 3) the estimates assume rapidly diminishing returns to marginal increases in investment; 4) the estimates leave out the effect of increased enforcement on taxpayer decisionmaking; and 5) the use of the 10-year window means that the long-run benefits of increased enforcement are excluded.

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September 8, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Lederman Presents Best Practices In Tax Rulings Transparency Virtually Today At UC-Hastings

Leandra Lederman (Indiana-Bloomington) presents Of Risks and Remedies: Best Practices in Tax Rulings Transparency virtually at UC-Hastings today as part of its Tax Speakers Series hosted by Heather Field and Manoj Viswanathan:

Lederman-leandraThe phrase “international scandal” hardly brings to mind tax rulings. It is not just that tax rulings may seem arcane, they are also a legitimate tax administration tool. Advance tax rulings provide certainty to taxpayers and the tax administration on the tax treatment of a planned transaction, lowering costs on both sides. Advance tax rulings are therefore openly used by many countries, including the United States and numerous European countries. Yet, secrecy that is followed by criticism and often by revelations that may embarrass a country’s leaders is a recurring aspect of these rulings. The United States has experienced this, and currently keeps Advance Pricing Agreements (APAs) confidential, while publishing letter rulings in anonymized form.

The 2014 “LuxLeaks” scandal, revealing what the press sometimes termed “sweetheart deals” between the Luxembourg tax authority and multinational companies, is probably the best-known scandal regarding tax rulings. LuxLeaks helped trigger legal changes that require tax authorities, including those of European countries and the United States, to automatically share information about cross-border advance rulings with other countries’ tax authorities. Luxembourg’s tax rulings, along with U.S. APAs, otherwise remain confidential.

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September 8, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Lesson From The Tax Court: Form Over Substance Gives Taxpayers A Double Tax Benefit

Tax Court (2020)Today’s lesson is about form and substance.  Tax practitioners are often called upon to decide what transactional form best accomplishes a client’s substantive purpose.  The power to choose the form of transactions sometimes creates a tension with the underlying economic substance when taxpayers and their advisors use form to disguise substance in the never-ending quest to gain tax benefits.  Courts and the IRS regularly police transactions using various doctrines to decide when form must yield to substance (e.g. step transaction doctrine, economic benefit doctrine).   When form is too much in tension with substance, substance wins.  Congress has attempted to codify this idea in §7701(o).

Today's lesson illustrates where tax law permits form to triumph over substance.  In Jon Dickinson and Helen Dickinson v. Commissioner, T.C. Memo. 2020-128 (Sept. 3, 2020)(Judge Greaves) the taxpayers were able to obtain the double tax benefit of donating appreciated shares of stock to charity by being very careful with the form of the donation.  Congress explicitly permits the form of a transaction to govern the tax result in charitable stock donation.  The tricky part of this case was that the taxpayers were donating shares of a closely held corporation.  And that implicates the assignment of income doctrine, one of those substance-over-form doctrines that courts use.  To see how Judge Greaves resolves the tension in favor of the taxpayer, see below the fold.

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September 8, 2020 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (4)

Monday, September 7, 2020

Hatfield Presents Tax Lawyer Professional Standards, 1985-2015 Virtually Today At Christ's College, Cambridge

Michael Hatfield (University of Washington) presents The Rise of Law and the Fall of Circular 230: Tax Lawyer Professional Standards, 1985-2015 at the 29th Annual Tax Research Network Conference virtually today at Christ’s College, Cambridge:

HatfieldMichael (2017)This Article is forthcoming in the Florida Tax Review. It completes the series on the history of professional responsibility standards for US tax lawyers since 1945. The first article in the series was published in 2012: Legal Ethics and Federal Taxes, 1945-1965: Patriotism, Duties, and Advice, 12 Fla. Tax Rev. 1 (2012); and the second in 2014: Committee Opinions and Treasury Regulation: Tax Lawyer Ethics, 1965-1985, 14 Fla. Tax Rev. 675 (2014). These two articles explored the development of professional responsibility standards for tax lawyers from 1945-1985.

This third article focuses on the two issues that dominated discussions of professional responsibility standards for tax lawyers in the 1985-2015 period: return position standards and tax shelter opinions.

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September 7, 2020 in Colloquia, Scholarship, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Kysar: Unravelling The Tax Treaty

Rebecca Kysar (Fordham), Unravelling the Tax Treaty, 104 Minn. L. Rev. 1755 (2020) (reviewed by David Elkins (Netanya) here):

Coordination among nations over the taxation of international transactions rests on a network of some 2,000 bilateral double tax treaties. The double tax treaty is, in many ways, the roots of the international system of taxation. That system, however, is in upheaval in the face of globalization, technological advances, taxpayer abuse, and shifting political tides. In the academic literature, however, scrutiny of tax treaties is largely confined to the albeit important question of whether tax treaties are beneficial for developing countries. Surprisingly little consideration has been paid to whether developed countries, like the United States, should continue to sign tax treaties with one another, and no formal revenue or economic analyses of the treaties has been undertaken by the United States government. In fact, little evidence or theory exists to support entrance into tax treaties by the United States, and examination of investment flows indicates the treaties may even lose U.S. revenues. Problematically, the treaties also thwart reforms of the antiquated and broken international tax system. The trajectory of the recent U.S. tax legislation illustrates this phenomenon.

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September 7, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (1)

Sunday, September 6, 2020

The Top Five New Tax Papers

This week's list of the Top 5 Recent Tax Paper Downloads is the same as last week's list, with some minor reshuffling of the order within the Top 5:

  1. SSRN Logo (2018)[479 Downloads]  Policy Options for Taxing the Rich, by Lily Batchelder (NYU) & David Kamin (NYU)
  2. [444 Downloads]  Ending Corporate Tax Avoidance and Tax Competition: A Plan to Collect the Tax Deficit of Multinationals, by Kimberly Clausing (UCLA), Emmanuel Saez (UC-Berkeley) & Gabriel Zucman (UC-Berkeley),
  3. [406 Downloads]  Rethinking Tax for the Digital Economy After COVID-19, by Tarcisio Diniz Magalhaes (McGill) & Allison Christians (McGill) (reviewed by Young Ran (Christine) Kim (Utah) here)
  4. [237 Downloads]  The Effect of U.S. Tax Reform on the Tax Burdens of U.S. Domestic and Multinational Corporations, by Scott Dyreng (Duke), Fabio Gaertner (Wisconsin), Jeffrey Hoopes (North Carolina) & Mary Vernon (Wisconsin)
  5. [234 Downloads]  What Are Minimum Taxes, and Why Might One Favor or Disfavor Them?, by Daniel Shaviro (NYU)

September 6, 2020 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink | Comments (0)

Saturday, September 5, 2020

On 'Dynastic' Inequality

Daniel Halliday (Melbourne) & Miranda Stewart (Melbourne), On 'Dynastic' Inequality, in The Oxford Handbook of Intergenerational Ethics (Stephen Gardiner (Washington) ed., Oxford University Press 2020):

This chapter investigates whether the replication of inequality is, other things being equal, morally objectionable in ways not applicable to inequality that remains confined to a single generation or ‘birth cohort’. The focus is both theoretical and practical. The chapter considers the philosophical foundations that might lie behind an objection to dynastic inequality, negotiating the diversity of egalitarian views supporting this position, and the complexity around the causal mechanisms at work in cases where inequality has a dynastic tendency. It then discusses the policy reforms that might target inequalities that replicate old distributive trends while leaving newly produced trends more intact, with a focus on tax policy. Current tax rules in most developed economies do not make a distinction between new and old influences on the material distribution. Accordingly, it is likely that the tax reforms implied could be quite extensive. ...

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September 5, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (1)