Paul L. Caron
Dean





Monday, February 6, 2023

Lesson From The Tax Court: The Tax Court Is Not Your Advocate

Camp (2021)Today I present two lessons.  First, we learn why diabetes is not a per se disability sufficient to avoid penalties for early 401(k) distributions.  Second, we learn that pro se litigants cannot rely on the Tax Court to consider potential arguments they could have raised, but did not.

Diabetes is a well-known and widespread disease, afflicting some 37.3 million people in the U.S., according to the CDC’s 2022 National Diabetes Statistics Report.  That’s just over 11% of the US population.  Medical complications abound, as detailed in this report from the Diabetes Institute Research Foundation.

Managing diabetes and its attendant complications can be difficult and expensive.  In recognition of that, Canada gives this tax credit to Canadians who must manage the disease.  And in the U.S., many of the costs associated with diabetes qualify for the medical expense deduction under §213.  See e.g. IRS Publication 502 (2021) at p. 7 (explaining that cost of blood sugar test kit for diabetes is a qualifying medical expense).

In Robert B. Lucas v. Commissioner, T.C. Memo. 2023-9 (Jan. 17, 2023) (Judge Urda), the unemployed taxpayer took an early distribution from his 401(k) plan to help make ends meet, which included helping to manage his diabetes.  The issue was whether he had to pay the §72(t) 10% penalty for early distributions.  He could avoid the entire penalty if his diabetes qualified as a disability, and he could avoid some of it if the distribution was used for expenses allowable as a §213 deduction.  As to the first, Judge Urda teaches us why diabetes is not, in and of itself, a disability sufficient to escape the 10% penalty.  As to the second, Judge Urda notes the issue but, because the taxpayer did not raise it, “[w]e accordingly deem the issue forfeited.”  Op. at 4.  In doing that, Judge Urda teaches an important lesson on the role of the Tax Court.

Details below the fold.

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February 6, 2023 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (0)

Sunday, February 5, 2023

Aprill & Mayer: 21st Century Churches And Federal Tax Law

Ellen P. Aprill (Loyola-L.A.; Google Scholar) & Lloyd Hitoshi Mayer (Notre Dame; Google Scholar), 21st Century Churches and Federal Tax Law:

Federal tax treatment matters to churches, the term the IRS uses for all types of religious congregations, including synagogues, mosques, and temples. The federal tax provisions most significant for churches and certain entities closely related to them, however, are not those that the public and commentators often assume. Exemption from income tax and the ability of donors to deduct contributions, the benefits that receive the most public attention, in fact provide surprisingly little benefit either to churches in the aggregate or to most individual churches. Their status as organizations tax-exempt under section 501(c)(3) of the Internal Revenue Code, moreover, imposes a variety of burdens on them. The burdens include limitations on lobbying and the prohibition on any intervention in campaigns for public office.

At the same time churches enjoy special tax benefits not afforded to other section 501(c)(3) organizations, not even other kinds of tax-exempt religious organizations. These special benefits make church status appealing. Such benefits include exemption from filing the IRS Form 990, an annual information return that, with the exception of the names and addresses of major donors, is also publicly available. In addition, the IRS cannot begin any audit of a church unless it complies with a number of procedures.

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February 5, 2023 in Faith, Scholarship, Tax, Tax Scholarship | Permalink

The Top Five New Tax Papers

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

  1. SSRN Logo (2018) [629 Downloads]  The Declining Appeal of Inherited Retirement Accounts, by Richard L. Kaplan (Illinois; Google Scholar)
  2. [567 Downloads]  Pillar 2, Fiat, and the EU Unanimity Rule on Tax Matters, by Rita de la Feria (Leeds)
  3. [371 Downloads]  State Strategic Responses to the GloBE Rules, by Heydon Wardell-Burrus (Oxford) (reviewed by David Elkins (Netanya; (Google Scholar) here)
  4. [219 Downloads]  Textualism, The Role And Authoritativeness Of Tax Legislative History, And Stanley Surrey, by George Yin (Virginia) (reviewed by Sloan Speck (Colorado; Google Scholar) here)
  5. [106 Downloads]  Multistate Business Entities, by Andrew Appleby (Stetson; Google Scholar) & Tomer Stein (Stetson)

February 5, 2023 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink

Saturday, February 4, 2023

Call For Papers: BI Norwegian Business School Workshop On Taxation, Citizenship, And Democracy

Call For Papers:

NBS 3We invite submissions from scholars in from law, politics, economics, and history to jointly discuss the interlinking between taxation, citizenship, and democracy. The workshop and publication strive for a multidisciplinary approach and thought-provoking ideas on the theme. In contrast to general legal scholarship, formal citizenship has not been of particular interest to tax scholarship. 

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February 4, 2023 in Conferences, Scholarship, Tax, Tax Conferences, Tax Scholarship | Permalink

Friday, February 3, 2023

Weekly SSRN Tax Article Review And Roundup: Layser Reviews Household Asymmetric Risk Of Foreclosure From Tax Assessment Limit

This week, Michelle Layser (San Diego) reviews Sebastien Bradley (Drexel; Google Scholar), Da Huang (Utah; Google Scholar), Nathan Seegert (Utah; Google Scholar), Household Asymmetric Risk of Foreclosure From Tax Assessment Limit (Jan. 21, 2023).

Michelle-layserDuring the pandemic, U.S. housing prices soared. In many cities, rising home prices can trigger higher assessed values for property taxation. But in California and 16 other states with assessment limits, laws limit how much appreciation cities can take into account for property tax purposes. That is good news for homeowners here in San Diego, where housing prices in March 2022 were up a whopping 29.9% from the previous year. Since California law caps the annual increase in assessed value at 2%, homeowners were protected from property tax spikes during that period.

Then came the fall. From April to September, prices in San Diego fell 5.2%, and they have continued to drop

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February 3, 2023 in Michelle Layser, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Next Week’s Tax Workshops

Next Week's Tax Workshops - linkedinTuesday, February 7: Brian Galle (Georgetown; Google Scholar) will present Solving the Valuation Challenge: The ULTRA Method for Taxing Extreme Wealth (with David Gamage (Indiana-Maurer; Google Scholar) & Darien Shanske (UC-Davis; Google Scholar)) (reviewed by Young Ran (Christine) Kim (Cardozo; Google Scholar) here) as part of the Columbia Davis Polk & Wardwell Tax Policy Colloquium. If you would like to attend, please contact David Schizer

Tuesday, February 7: Allison Christians (McGill; Google Scholar) will present Global Tax Reform and Mythical International Law (with Tarcísio Diniz Magalhães (Antwerp; Google Scholar)) as part of the Georgetown Tax Law and Public Finance Workshop. If you would like to attend, please contact Emily Satterthwaite and Dayanand Manoli.

Tuesday, February 7: Sarah B. Lawsky (Northwestern; Google Scholar) will present Coding The Code: Catala And Computationally Accessible Tax Law, 75 S.M.U. L. Rev. 535 (2022), as part of the Duke Tax Policy Seminar. If you would like to attend, please contact Lawrence Zelenak

Wednesday, February 8: Jonathan Choi (Minnesota; Google Scholar) will present Subjective Costs of Taxation as part of the Northwestern Advanced Topics in Taxation Colloquium. If you would like to attend, please contact Gregg Polsky

Thursday, February 9: Katarzyna Anna Bilicka (Utah State; Google Scholar) will present as part of the UCLA Colloquium on Tax Policy and Public Finance. If you would like to attend, please contact Kirk Stark and Jason Oh.

Friday, February 10: Robert Schütze (Durham) will present Limits to the Union’s ‘Internal Market’ Competence(s): Constitutional Comparisons (from The Question of Competence in the European Union, Oxford University Press 2014) as part of the Oxford-Virginia Legal Dialogs. If you would like to attend, please contact Tsilly Dagan and Ruth Mason

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February 3, 2023 in Colloquia, Legal Education, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink

Gondwe Presents The Life-Saving Potential Of Direct Public Financial Assistance To Survivors Of Intimate Partner Violence Today At Indiana

Nyamagaga Gondwe (Wisconsin; Google Scholar) presents Emergency Exit: The Life-Saving Potential of Direct Public Financial Assistance to Survivors of Intimate Partner Violence at Indiana today as part of its Tax Policy Colloquium hosted by Leandra Lederman:

Gondwe (2023)Intimate partner violence (IPV) is viewed primarily as a class of criminal behavior in federal policy. But the criminal justice system operates through a model of individual accountability, which means that solutions to IPV in American communities focus on education (proactive) and incarceration (reactive) as interventions.

However, public health studies on IPV suggest that the kinds of physical violence that result in arrest should not be seen as the central issue in addressing IPV. Instead, those studies suggest that physical violence should be thought of as a tool for one partner in a relationship to exert coercive power and control over the other partner. Put another way, physical violence is just one of multiple tools an abuser will use to control their partner. Other tools include emotional abuse, psychological abuse, and economic abuse.

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February 3, 2023 in Colloquia, Legal Education, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink

Thursday, February 2, 2023

Londoño-Vélez Presents Behavioral Responses To Wealth Taxation: Evidence From Colombia Today At UCLA

Juliana Londoño-Vélez (UCLA; Google Scholar) presents Behavioral Responses to Wealth Taxation: Evidence from Colombia (with Javier Avila-Mahecha (DIAN; Google Scholar)) at UCLA today as part of its Colloquium on Tax Policy and Public Finance hosted by Kirk Stark and Jason Oh:

Juliana Londoño-VélezWe study behavioral responses to personal wealth taxes in Colombia using tax microdata (1993-2016) linked with the leaked Panama Papers, which shed light on offshoring to Colombia’s most relevant tax havens. We leverage variation from four reforms that modified the wealth tax design—tax duration and rate schedule—and introduced discrete jumps in the tax liability. Using bunching and difference-in-difference techniques, we obtain four key results. First, we find salient and compelling evidence that wealth tax hikes cause taxpayers to lower their reported wealth instantly—a reporting response that slashes, at most, one-fifth of tax revenue. Second, this response can persist even after the wealth tax no longer applies—i.e., “hysteresis”—reflecting taxpayers’ strategic avoidance behavior. Third, taxpayers misreport what authorities cannot cross-verify: they inflate (interpersonal) debt and underreport non-third-party-reported business assets. Lastly, the wealthiest taxpayers respond to wealth tax hikes by hiding assets in hard-to-track entities in tax havens.

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February 2, 2023 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink

Bargain Basement Progressivity? Constitutional Flat Taxes, Demogrants, And Progressive Income Taxation

Samuel D. Brunson (Loyola-Chicago; Google Scholar), Bargain Basement Progressivity? Constitutional Flat Taxes, Demogrants, and Progressive Income Taxation, 53 Loy. U. Chi. L.J. 683 (2022):

State and local governments raise revenue in three primary ways: property, sales, and income taxes. Property and sales taxes tend to impose a higher burden on low-income households. To ensure the fairness and progressivity of their overall revenue system, states need their income tax to be sufficiently progressive.

Four states face an apparently insurmountable barrier to progressive income taxation: their state constitutions mandate that any income tax must have a flat rate, applicable to all taxpayers. Without a constitutional amendment, a difficult process, they cannot adopt marginal rates that increase as income increases.

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February 2, 2023 in Scholarship, Tax, Tax Scholarship | Permalink

Kaplan: The Declining Appeal Of Inherited Retirement Accounts

Richard L. Kaplan (Illinois; Google Scholar), The Declining Appeal of Inherited Retirement Accounts, 42 Va. Tax Rev. __ (2023): 

Virginia Tax Review (2021)As retirement accounts proliferate and grow in value, American retirees are increasingly leaving substantial balances in these accounts to their adult children, siblings, and other relatives. Until recently, these new owners were able to withdraw funds from these tax-favored accounts over their lifetimes as their personal circumstances dictated. 

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February 2, 2023 in Scholarship, Tax, Tax Scholarship | Permalink

Wednesday, February 1, 2023

Clausing Presents Capital Taxation And Market Power Today At Toronto

Kimberly Clausing (UCLA; Google Scholar) presents Capital Taxation and Market Power at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series hosted by Benjamin Alarie:

Kim-clausingIn recent decades, market power has increased substantially, as shown by measures that include industry concentration, mark-ups, and business profitability. While market power can generate benefits, it also raises vexing policy concerns, including the potential for adverse effects on labor markets, income inequality, and the dynamism of market competition. The concept of market power also has implications for how we conceptualize capital income, making it important to distinguish between normal and above-normal returns to capital. The tax system taxes both types of returns to capital, but often imperfectly and incompletely. 

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February 1, 2023 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink

Morse Presents APA Challenges To Old Tax Guidance And The Six-Year Default Limitations Period Today At Northwestern

Susie Morse (Texas; Google Scholar) presents Out of Time: APA Challenges to Old Tax Guidance and the Six-Year Default Limitations Period at Northwestern today as part of its Advanced Topics in Taxation Colloquium hosted by Gregg Polsky:

Susan morseOld regs should not be subject indefinitely to administrative procedure challenge. Instead, we should leave them alone. The consensus case law view that applies the six-year limitations period under 28 U.S.C. § 2401(a) with accrual at the time of promulgation, strikes the right balance between accuracy and repose. It correctly reflects that all of the elements of the administrative procedure claim are in place at the time of the alleged error, when the regulation was promulgated. When -- as in tax -- claims can be delayed through no fault of any plaintiff, the solution is to make appropriate administrative and equitable adjustments.

Conclusion
The puzzle presented by administrative procedure challenges to old regs amounts to a classic tension in law: the tradeoff between accuracy and repose. The puzzle is solved by the default six-year limitations period of 28 U.S.C. § 2401(a), which, under a case law consensus, begins to run when the final agency rulemaking action is taken for administrative procedure claims. Tax provides a good text case for this argument because it is a somewhat more difficulty case, due to the fact that most opportunities to raise administrative procedure claims arise not as facial challenges, bur rather in enforcement cases – whether deficiency or refund -- where the pre-litigation tax procedure can be lengthy. 

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February 1, 2023 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink

NY Times: Black Americans Are Much More Likely To Face Tax Audits, Study Finds

New York Times, Black Americans Are Much More Likely to Face Tax Audits, Study Finds:

AuditA new report documents systemic discrimination in how the I.R.S. selects taxpayers to be audited, with implications for a debate on the agency’s funding.

Black taxpayers are at least three times as likely to be audited by the Internal Revenue Service as other taxpayers, even after accounting for the differences in the types of returns each group is most likely to file, a team of economists has concluded in one of the most detailed studies yet on race and the nation’s tax system.

The findings do not suggest bias from individual tax enforcement agents, who do not know the race of the people they are auditing. They also do not suggest any valid reason for the I.R.S. to target Black Americans at such high rates; there is no evidence that group engages in more tax evasion than others.

Instead, the findings document discrimination in the computer algorithms the agency uses to determine who is selected for an audit, according to the study by economists from Stanford University [Hadi Elzayn, Daniel Ho], the University of Michigan [Evelyn Smith], the University of Chicago [Jacob Goldin, Arun Ramesh] and the Treasury Department [Robin Fisher, Thomas Hertz] [Measuring and Mitigating Racial Disparities in Tax Audits]:

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February 1, 2023 in Legal Education, Scholarship, Tax, Tax News, Tax Scholarship | Permalink

Ryznar: Exams In The Time Of ChatGPT

Margaret Ryznar (Indiana-McKinney), Exams in the Time of ChatGPT, 80 Wash. & Lee L. Rev. Online __ (2023):

Open AI ChatGPTThis article offers various methods to administer assessments while maintaining their integrity—after asking artificial intelligence writing tool ChatGPT for its views on the matter. The sophisticated response of the chatbot, which students can use in their written work, only raises the stakes of figuring out how to administer exams fairly.

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February 1, 2023 in Legal Ed Scholarship, Legal Education, Scholarship, Teaching | Permalink

Tuesday, January 31, 2023

Doran Presents Executive Compensation And Corporate Governance Today At Columbia

Michael Doran (Virginia; Google Scholar) presents Executive Compensation And Corporate Governance (reviewed by Sloan Speck (Colorado; Google Scholar) here) at Columbia today as part of its Davis Polk & Wardwell Tax Policy Colloquium hosted by David Schizer, Michael Love, Wojciech Kopczuk, and Alex Raskolnikov. 

Michael-doranOver the past four decades, Congress has repeatedly used tax policy to address executive-compensation practices, most notably through golden-parachute penalty taxes (enacted in 1984), a $1 million cap on compensation deductions (enacted in 1993 and expanded in 2017), and penalty taxes on nonqualified deferred compensation (enacted in 2004). The critical assumptions underlying these efforts are, first, that certain features of executive pay represent a failure of corporate governance and, second, that tax policy can correct that failure. The first assumption may or may not be correct; the theoretical and empirical arguments about it remain unresolved. But the second assumption is increasingly untenable. Penalty taxes have been largely ineffective in changing executive-compensation practices in the ways that legislators intend; in many instances, they actually exacerbate the features of executive pay that concern Congress in the first place. 

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January 31, 2023 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink

Goldin Presents Measurement And Mitigation Of Racial Disparities In Tax Audits Today At Georgetown

Jacob Goldin (Chicago; Google Scholar) presents Measurement and Mitigation of Racial Disparities in Tax Audits at Georgetown today as part of its Tax Law and Public Finance Workshop hosted by Emily Satterthwaite and Dayanand Manoli. 

Jacob-goldinGovernment agencies around the world use data-driven algorithms to allocate enforcement resources. Even when such algorithms are formally neutral with respect to protected characteristics like race, there is widespread concern that they can disproportionately burden vulnerable groups. We study differences in Internal Revenue Service (IRS) audit rates between Black and non-Black taxpayers. Because neither we nor the IRS observe taxpayer race, we propose and employ a novel partial identification strategy to estimate these differences. Despite race-blind audit selection, we find that Black taxpayers are audited at 2.9 to 4.7 times the rate of non-Black taxpayers. The main source of the disparity is differing audit rates by race among taxpayers claiming the Earned Income Tax Credit (EITC). Using counterfactual audit selection models for EITC claimants, we find that maximizing the detection of underreported taxes would not lead to Black taxpayers being audited at higher rates. In contrast, in these models, certain policies tend to increase the audit rate of Black taxpayers: (1) designing audit selection algorithms to minimize the “no-change rate”; (2) targeting erroneously claimed refundable credits rather than total under-reporting; and (3) limiting the share of more complex EITC returns that can be selected for audit. 

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January 31, 2023 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink

WSJ: Whose Name Goes First On Your Joint Tax Return? Probably Not The Woman's.

Wall Street Journal, Who Goes First on Your Joint Tax Return? Probably Not the Woman.:

1040The IRS doesn’t care, so why do most people put the man first on the 1040? Even Kamala Harris goes second to the second gentleman.

When calculating federal income taxes, it makes absolutely no difference which spouse is listed first on a joint tax return. An opposite-sex couple can put the man’s name first, start with the woman’s name, list them in order of income, go alphabetically or begin with the spouse who woke up earlier last Tuesday. It literally doesn’t matter one cent.

But there are two lines for names on Form 1040. Somebody has to go first, and somebody has to go second. ... According to a first-of-its-kind assessment from researchers from the U.S. Treasury Department and the University of Michigan, men’s names were listed first on 88% of joint returns filed by opposite-sex married couples in 2020. That figure has trickled down a little since 1996, when nearly all returns—97%—listed the man’s name first.

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January 31, 2023 in Legal Education, Scholarship, Tax, Tax Scholarship | Permalink

The Case Against Commercial Casebooks

W. David Ball (Santa Clara; Google Scholar) & Michelle Oberman (Santa Clara; Google Scholar), The Case Against Commercial Casebooks, 71 J. Legal Educ. __ (2023):

CasebooksOpen-source, online casebooks are a free alternative to the for-profit commercial casebooks that dominate the legal academy. They offer a host of benefits for students and professors alike. Online casebooks are surprisingly easy to create: literally the click of a button allows you to “clone” existing open-source casebooks, many of which closely track the cases and flow of the most popular commercial casebooks. Once “cloned,” it is simple to incorporate your own or others’ material, enabling professors to center their personal pedagogical goals and values as they train the next generation of lawyers.

Open-source casebooks are also free, permitting professors to meaningfully offset some of the educational costs incurred by our students. As law schools reflect on how they might build institutions that are more diverse, equitable and inclusive, open-source casebooks stand out as an obvious, attainable way to make meaningful progress towards those goals.

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January 31, 2023 in Legal Ed Scholarship, Legal Education, Scholarship, Teaching | Permalink

Monday, January 30, 2023

Clausing Delivers Pugh Lecture Today At San Diego On The Future of International Tax Cooperation

Kimberly Clausing (UCLA; Google Scholar) delivers the annual Richard Crawford Pugh Lecture on Tax Law & Policy at San Diego today on The Future of International Tax Cooperation:

Kim-clausingKimberly Clausing holds the Eric M. Zolt Chair in Tax Law and Policy.

During the first part of the Biden Administration, Clausing was the Deputy Assistant Secretary for Tax Analysis in the US Department of the Treasury, serving as the lead economist in the Office of Tax Policy. Prior to coming to UCLA, Clausing was the Thormund A. Miller and Walter Mintz Professor of Economics at Reed College.

Her research studies the taxation of multinational firms, examining how government decisions and corporate behavior interplay in the global economy. She has published numerous articles in this area, and she is the author of Open: The Progressive Case for Free Trade, Immigration, and Global Capital (Harvard University Press, 2019).

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January 30, 2023 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink

Lesson From The Tax Court: Corporations In The Bardo

Lincoln 2Lincoln in The Bardo is not a book for everyone.  It’s main characters (none of whom are Lincoln) are caught in the bardo, an indeterminate space between death and final after-life, whatever one conceives that to be.  But they are slow to realize it, clinging to a belief in their continued existence as they were.  Filled with unreliable narrators and casually vacillating in time and space, the novel is not an easy read.  But it is well worth the effort, being a lovely meditation on the meaning of life and the meaning of death.

XC Foundation v. Commissioner, T.C. Memo. 2023-2 (Jan. 5, 2023) (Judge Lauber), is an easy read about a corporation in the bardo.  It teaches a practical lesson: always ensure that your corporate client is fully alive and well under state law before you try to file a petition.  There, a corporation attempted to file a petition to contest an IRS decision to revoke its 501(c)(3) status.  Well, actually, the corporation did not file the petition.  It couldn’t.  It was caught in a kind of bardo, an indeterminate space between corporate life and permanent corporate death.  California, the state that had given it life, had suspended its charter, killing its capacity to sue and be sued.  But like the characters in the novel, it ignored its own death and tried to convince the Tax Court to do so as well.  It turns out that taxpayers in the bardo cannot file petitions that the Tax Court can hear, just as Lincoln could not hear the pleas of the novel's characters.  They are the pleas of ghosts.  Details below the fold.

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January 30, 2023 in Bryan Camp, New Cases, Scholarship, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (2)

Sunday, January 29, 2023

The Top Five New Tax Papers

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

  1. SSRN Logo (2018) [520 Downloads]  Pillar 2, Fiat, and the EU Unanimity Rule on Tax Matters, by Rita de la Feria (Leeds)
  2. [337 Downloads]  State Strategic Responses to the GloBE Rules, by Heydon Wardell-Burrus (Oxford) (reviewed by David Elkins (Netanya; (Google Scholar) here)
  3. [190 Downloads]  Textualism, The Role And Authoritativeness Of Tax Legislative History, And Stanley Surrey, by George Yin (Virginia) (reviewed by Sloan Speck (Colorado; Google Scholar) here)
  4. [102 Downloads]  Multistate Business Entities, by Andrew Appleby (Stetson; Google Scholar) & Tomer Stein (Stetson)
  5. [91 Downloads]  The (Uncertain) Future of Corporate Tax Shelters, by Joshua Blank (UC-Irvine; Google Scholar) & Ari Glogower (Northwestern; Google Scholar) (reviewed by Michelle Layser (San Diego; Google Scholar) here)

January 29, 2023 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink

Saturday, January 28, 2023

Jan Brueckner And Blaine Saito Present Tax Papers At UCLA

Jan Brueckner (UC-Irvine; Google Scholar) presented Taxes and Telework: The Impacts of State Income Taxes in a Work-from-Home Economy (with David R. Agrawal (Kentucky; Google Scholar)) at UCLA this week as part of its Colloquium on Tax Policy and Public Finance hosted by Kirk Stark and Jason Oh:

Jan bruecknerThis paper studies the interstate effects of decentralized taxation and spending when individuals can work from home (WFH). Because WFH decouples population and employment, the analysis of tax impacts on state populations, employment levels, wages and housing prices is radically different than in the standard model where individuals live and work in the same state. Which state can tax teleworkers—leading to either source or residence taxation—matters for tax impacts under WFH. Our main findings, which pertain to the employment and wage effects of WFH, show that a shift from a non-WFH economy to WFH reduces employment and raises the wage in high-tax states, with larger effects under source taxation. Once WHF is established, an increase in a state’s tax rate either reduces employment further while raising the wage (source taxation) or leaves the labor market unaffected (residence taxation). We show that only the residence-taxation equilibrium is efficient.

Blaine Saito (Northeastern; Google Scholar) presented Public Tax Actors at UCLA last week:

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January 28, 2023 in Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink

Friday, January 27, 2023

Weekly SSRN Tax Article Review And Roundup: Roberts Reviews Trade, Leakage, And The Design Of A Carbon Tax By Weisbach et al.

This week, Tracey Roberts (Cumberland; Google Scholar) reviews a new work by David A. Weisbach (Chicago; Google Scholar), Samuel S. Kortum (Yale; Google Scholar), Yujia Yao (IMF) and Michael Wang (Northwestern), Trade, Leakage, and the Design of a Carbon Tax (Jan. 20, 2023):

Roberts (2020)

Communities throughout the world are facing extreme weather events, including heat waves, droughts, wildfires, severe storms events, tornados, hurricanes/ tropical cyclones, storm surges and floods. Important and unique ecosystems are suffering irreparable harm, including polar and high mountain areas, tropical systems, and coral reefs. The risks of large-scale climate shifts, such as deglaciation, ice sheet loss, rapid sea-level rise, ocean acidification, and changes in thermohaline circulation system are rising. We are currently witnessing secondary effects of these processes including biodiversity loss, fishery collapse, deforestation, conflicts over natural resources, global migration, and threats to economic, social and political stability. All countries have a stake in these outcomes. Ideally, all countries would coordinate their efforts to address climate change.

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January 27, 2023 in Scholarship, Tax, Tax Scholarship, Tracey Roberts, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Next Week’s Tax Workshops

Tax Workshops (Big)Monday, January 30: Kimberly Clausing (UCLA; Google Scholar) will present The Future of International Tax Cooperation as part of the annual Richard Crawford Pugh Lecture on Tax Law & Policy at San Diego. If you would like to attend, please RSVP here.

Tuesday, January 31: Jacob Goldin (Chicago; Google Scholar) will present Measurement and Mitigation of Racial Disparities in Tax Audits as part of the Georgetown Tax Law and Public Finance Workshop. If you would like to attend, please contact Emily Satterthwaite and Dayanand Manoli.

Tuesday, January 31: Michael Doran (Virginia; Google Scholar) will present Executive Compensation And Corporate Governance (reviewed by Sloan Speck (Colorado; Google Scholar) here) as part of the Columbia Davis Polk & Wardwell Tax Policy Colloquium. If you would like to attend, please contact David Schizer

Wednesday, February 1: Susan Morse (Texas; Google Scholar) will present Out of Time: APA Challenges to Old Tax Guidance and the Six-Year Default Limitations Period as part of the Northwestern Advanced Topics in Taxation Colloquium. If you would like to attend, please contact Gregg Polsky

Wednesday, February 1: Kimberly Clausing (UCLA; Google Scholar) will present Capital Taxation and Market Power as part of the Toronto James Hausman Tax Law and Policy Workshop Series. If you would like to attend, please contact Benjamin Alarie

Thursday, February 2: Juliana Londoño-Vélez (UCLA; Google Scholar) will present Behavioral Responses to Wealth Taxation: Evidence from Colombia (with Javier Avila-Mahecha (DIAN; Google Scholar)) as part of the UCLA Colloquium on Tax Policy and Public Finance. If you would like to attend, please contact Kirk Stark and Jason Oh.

Friday, February 3: Nyamagaga Gondwe (Wisconsin; Google Scholar) will present Emergency Exit: The Life-Saving Potential of Direct Public Financial Assistance to Survivors of Intimate Partner Violence as part of the Indiana Tax Policy Colloquium. If you would like to attend, please contact Leandra Lederman.

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January 27, 2023 in Colloquia, Legal Education, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink

Alarie: The Rise Of The Robotic Tax Analyst

Benjamin Alarie (Toronto; Google Scholar; CEO, Blue J Legal), The Rise of the Robotic Tax Analyst, 178 Tax Notes Fed. 57 (Jan. 2, 2023):

Open AI ChatGPTAs a bold taxwriting experiment, this installment of Blue J Predicts has been generated with the help of an AI assistant, OpenAI’s “Generative Pre-Trained Transformer 3” (GPT-3). GPT-3 is a large language model developed by OpenAI and backed by Microsoft. It is an inexhaustible generator of text and can write with accuracy in English about almost any topic. It has performed its duty, with my human companionship, indefatigably.

This isn’t the first time that a legal academic has invoked a robotic coauthor, and I expect that these kinds of tools will become increasingly commonplace. I expect that eventually they will be about as remarkable as using a spelling or grammar checker. At this moment, however, before the rise of the robotic tax analyst, using GPT-3 to help write this article is likely to raise some eyebrows.

In October 2021 I produced a peer-reviewed law review article with my academic colleague, the late (and great) tax law professor Arthur Cockfield of Queen’s University. The article was notable for being the first peer-reviewed law review article to extensively leverage GPT-3 in its production. In that article — after a short introduction penned by us, Benjamin Alarie and Cockfield — we gave GPT-3 control of the metaphorical keyboard and allowed it to produce its textual analysis uninterrupted and unedited.

The results were mixed and intriguing, and certainly pointed in the direction of future possibility. In our view, GPT-3 had potential. In the article, we speculated on the future of AI in legal scholarship and asked provocatively in the title, “Will Machines Replace Us?” Cockfield and I concluded that “although GPT-3 is not up to the task of replacing law review authors currently, we are far less confident that GPT-5 or GPT-100 might not be up to the task in future.”

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January 27, 2023 in Legal Education, Scholarship, Tax, Tax Analysts, Tax Scholarship | Permalink

Thursday, January 26, 2023

Mason Presents Bibb Balancing Today At The OMG Transatlantic Tax Talks

Ruth Mason (Virginia; Google Scholar) presents Bibb Balancing, 91 Geo. Wash. L. Rev. __ (2023) (with Michael S. Knoll (Penn)) today as part of the OMG Transatlantic Tax Talks Series (OMG = Oxford-Michigan-MIT-Munich-Georgetown):

Ruth masonCourts and commentators have long understood dormant Commerce Clause doctrine to contain two types of cases: discrimination and undue burdens. This Article argues for a more nuanced understanding that divides undue burdens into single-state burdens—which arise from the application of a single state’s law alone—and mismatch burdens, which arise from legal diversity. Although the Supreme Court purports to apply Pike balancing in all undue-burden cases, we show that the Court’s approach in mismatch cases differs substantially. Specifically, unlike in single-state cases, balancing in mismatch cases involves an implicit and potentially problematic comparison by the Court between the challenged state’s regulation and those of other states. We label analysis in mismatch cases “Bibb balancing,” after the famous mudflaps case, and we show that mismatch cases present the Court with a more challenging set of issues than do other types of dormant Commerce Clause cases.

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January 26, 2023 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink

Brauner Presents Taxation Of Information And The Data Revolution Today At Florida

1-26-23 Brooks and Brauner revised
Yariv Brauner
(Florida; Google Scholar) presents Taxation of Information and the Data Revolution at Florida today as part of a celebration of his academic contribution and appointment to the Hugh Culverhouse Eminent Scholar Chair in Taxation hosted by Charlene Luke:

The digital revolution has put enormous demands on the law due to the huge, quick-moving social changes it has created. The reason tax law hasn't advanced as much as other legal fields in responding to these demands is likely because it combines the problem of taxing information with the more general issue of taxing intangibles. This essay makes the case that information is distinct and necessitates a distinctive policy and analysis. It initially argues that information cannot be taxed under the current international tax rules. Therefore, reform is required, and the paper demonstrates why it is vital right now. Finally, the article makes the case that reform is also feasible by outlining three potential reform routes and contrasting their benefits and drawbacks.

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January 26, 2023 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink

Christians & Shay: The Consistency Of Pillar 2 UTPR With U.S. Bilateral Tax Treaties

Allison Christians (McGill; Google Scholar) & Stephen E. Shay (Boston College; Google Scholar), The Consistency of Pillar 2 UTPR With U.S. Bilateral Tax Treaties, 178 Tax Notes Fed. 499 (Jan. 23, 2023):

Tax Notes Federal (2022)In this report, Christians and Shay explain why the pillar 2 undertaxed profits rule would be consistent with U.S. bilateral income tax treaties, and they explore some of the reasons underlying claims that the UTPR is incompatible with those treaties.

Conclusion
The UTPR is not a tax on income, nor is it likely to be characterized as in lieu of a tax on income. Instead, it is a cash tax expense that can be collected in any manner and most probably is in the nature of an excise tax. Contrary to the claims of GOP lawmakers and other commentators, the better view is that the UTPR is not covered by existing tax treaties at all, so it cannot be said to conflict with their terms.

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January 26, 2023 in Scholarship, Tax, Tax Analysts, Tax Scholarship | Permalink

Wednesday, January 25, 2023

The 50 Most Downloaded U.S. Tax Law Professors Of 2022

Ssrn

Rank Name School Downloads
1 Reuven Avi-Yonah Michigan 11,679
2 Daniel Hemel NYU 4,980
3 Bridget Crawford Pace 4,235
4 Robert Sitkoff Harvard 3,074
5 Zachary Liscow Yale 2,780
6 Dhammika Dharmapala Chicago 2,745
7 Ruth Mason Virginia 2,693
8 Richard Ainsworth Boston University 2,674
9 Darien Shanske UC-Davis 2,617
10 David Gamage Indiana 2,595
11 Louis Kaplow Harvard 2,535
12 Kyle Rozema Washington University 2,498
13 Kimberley Clausing UCLA 2,270
14 Michael Doran Virginia 2,154
15 Lily Batchelder NYU 2,069
16 Brad Borden Brooklyn 1,991
17 Young Ran (Christine) Kim Cardozo 1,917
18 Dan Shaviro NYU 1,849
19 David Kamin NYU 1,726
20 Victoria Haneman Creighton 1,687
21 Margaret Ryznar Indiana-Indianapolis 1,557
22 Edward McCaffery USC 1,454
23 Chris Sanchirico Penn 1,432
24 Francine Lipman UNLV 1,369
25 Michael Simkovic USC 1,364
26 Paul Caron Pepperdine 1,312
27 Victor Fleischer UC-Irvine 1,305
28 Jeremy Bearer-Friend George Washington 1,304
29 Omri Marian UC-Irvine 1,296
30 Ari Glogower Ohio State 1,291
31 Brian Galle Georgetown 1,230
32 Hugh Ault Boston College 1,227
33 David Weisbach Chicago 1,194
34 Kristin Hickman Minnesota 1,146
35 Nancy McLaughlin Utah 1,130

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January 25, 2023 in Legal Education, Scholarship, Tax, Tax Prof Rankings, Tax Scholarship | Permalink

Tuesday, January 24, 2023

Parsons Presents The Shifting Economic Allegiance Of Capital Gains Today At Columbia

Amanda Parsons (Colorado; Google Scholar) presents The Shifting Economic Allegiance Of Capital Gains, 26 Fla. Tax Rev. ___ (2023), at Columbia today as part of its Davis Polk & Wardwell Tax Policy Colloquium hosted by Wojciech Kopczuk, Michael Love,  Alex Raskolnikov, and David Schizer:

Amanda parsonsTechnological advances and the digitalization of the global economy have created an economic environment beyond the imagination of the original designers of the international tax system. Much scholarly attention has been paid to the question of how these economic transformations should affect which country is able to tax a multinational company’s income. But which country should be able to tax capital gains income from the sale of that company’s shares is an important and overlooked question.

This Article answers this question. It concludes that taxing authority over capital gains income must be reallocated to the countries in which companies conduct business. In our modern, digitalized economy, this reallocation is necessary to align international sourcing rules with international tax law’s underlying principles.

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January 24, 2023 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink

Sarkar Presents Capital Migration Today At UC-San Francisco

Shayak Sarkar (UC-Davis; Google Scholar) presents Capital Migration at UC-San Francisco today as part of its Center on Tax Law' Tax Policy Colloquium hosted by Heather Field and Manoj Viswanathan:

Shayak sarkarMoney moves, while migrants linger. If humans face borders, capital and corporations are purportedly “borderless.” Yet what precisely renders capital and reliant businesses foreign, the designation underlying migration?

This Article unpacks capital migration and the responses it elicits. It does so by parsing capital and corporate migration’s intersection with human migration as well as identifying conceptual parallels. As a first parallel, the citizenship binary is insufficient to understand both human and capital migration, as international tax law illustrates. Second, on the recurrent question of federalism, states, alongside the federal government, possess tax authority over foreign capital and corporations. As I argue, just as immigration tax federalism permits nonuniformity, so might capital and corporate tax federalism under the Foreign Commerce Clause.

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January 24, 2023 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink

Weisbach Posts Three Tax Papers On SSRN

David A. Weisbach (Chicago; Google Scholar) has posted three tax papers on SSRN:

SSRN Logo (2018)Against Anti-Tax Exceptionalism:

This paper examines the arguments found in what has become known as the anti-tax exceptionalism literature. That literature seeks to apply the rules of administrative law to tax procedures. The core claim is that the procedures used by the Internal Revenue Service and the Treasury routinely violate the requirements of administrative law. Secondarily, that literature argues that this is normatively bad: the Treasury and Internal Revenue Service should not be treated differently from other administrative agencies because the tax system is not exceptional. Promoting the goals of administrative law, that literature argues, requires that the tax system conform to standard procedures.

This paper addresses both claims. First, it shows that the procedures used by tax administrators substantially comply with administrative law requirements. The central doctrinal claim of the anti-tax exceptionalism literature is incorrect. Second, the paper considers normative concerns of the anti-tax exceptionalism literature, focusing on three: (i) uniformity versus exceptionalism, (ii) information flows, and (iii) accountability. Regarding uniformity, even assuming that current tax procedures do not comply with administrative law requirements, uniformity would not be a desirable goal. Administrative law is, and should remain, flexible, adapting to the needs of widely varying agencies. Moreover, the goal of reforms to tax procedures should be to improve the operation of the system, not conform it to procedures used by agencies that operate in different contexts. The framing of uniformity versus exceptionalism misstates the issue. Regarding information flows and accountability, the remedies suggested by the anti-tax exceptionalism literature, notably greater use of notice and comment procedures and more supervision of tax administration by courts, are not good ways of meeting those goals. The paper offers alternative, better methods of improving information flows and accountability. The paper concludes that we should reject the claims of the anti-tax exceptionalism literature on both positive and normative grounds. 

Constrained Income Redistribution and Inequality: Legal Rules Compared to Taxes and Transfers:

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January 24, 2023 in Scholarship, Tax, Tax Scholarship | Permalink

Monday, January 23, 2023

Choi Presents Subjective Costs Of Taxation Today At Florida

Jonathan choi florida
Jonathan H. Choi
(Minnesota; Google Scholar) presents Subjective Costs of Taxation at Florida today as part of its Marshall M. Criser Distinguished Faculty Workshop:

This Article introduces and estimates “subjective costs” of tax compliance, which are costs of tax compliance that people experience directly and individually. To measure these costs, we conducted a survey experiment assessing how much taxpayers would pay to reduce the unpleasantness associated with filing a tax return. The experiment revealed that taxpayers are more concerned about inadvertent mistakes in their tax filings than by the time spent on compliance. Respondents also only ascribed meaningful value to eliminating all tax compliance work; they ascribed essentially no value to marginal time savings. Additionally, eliminating tax compliance time for high-income taxpayers and taxpayers with complex returns is not worth much more than eliminating tax compliance time for low-income taxpayers with simple returns.

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January 23, 2023 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink

Nam Presents Just Taxation Of Crime: Should The Commission Of Crime Change One's Tax Liability? At Indiana

Jeesoo Nam (USC; Google Scholar) presented Just Taxation of Crime: Should the Commission of Crime Change One's Tax Liability? at Indiana-Maurer last Friday as part of its Tax Policy Colloquium hosted by Leandra Lederman:

Jeesoonam1The tax law treats criminals differently from non-criminals. Should it? Under the public policy doctrine, for example, various tax deductions are disallowed if they are closely tied to criminal activity. Criminal activity is, in multiple ways, tax disadvantaged compared to non-criminal activity.

This Article considers a variety of possible justifications. (1) The tax disadvantage provides an incentive not to commit crime. (2) The tax disadvantage helps to bring deserved punishment to the criminal. (3) Criminals have given up their right not to be taxed. (4) Criminals have taken an unfair advantage and so must be stripped of that unfair advantage. (5) Criminals deserve to bear the costs that they culpably and wrongfully created.

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January 23, 2023 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink

Lesson From The Tax Court: The Meaning Of 'Business Premises' In §119

Camp (2021)It’s a new year.  And what better way to start than with the fundamental lesson I teach my students in our first few classes:  “Everything is income.  Everything including all your non-cash receipts.”  Yeah, I actually sing that to the class, to the tune of Everything is Awesome from the Lego movie.  It scans.  Treas. Reg. 1.61-1(a) emphasizes that point when it tells us that “Gross income includes income realized in any form, whether in money, property, or services.”

So employer-provided housing is income to an employee, just as if the employer paid the employee cash and the employee spends that cash to rent a house.  But we all know that Congress also permits taxpayers to exclude certain types of income from taxation.  Part of the art of tax practice is to try and find applicable exclusions to reduce the gross income that must be reported.  One such exclusion is §119 which sometimes permits an exclusion for the value of housing provided by an employer to an employee.

In Cory H. Smith v. Commissioner, T.C. Memo. 2023-12 (Jan. 12, 2023) (Judge Toro), we learn a useful lesson about the scope of the business premises requirement in §119: housing that is not within the physical boundaries of the employer’s facilities is highly unlikely to qualify for the §119 exclusion.  Mr. Smith’s employer hired him to work in Pine Gap, Australia.  It provided a house for him to live in about 11 miles away from his office, in a small city outside of Pine Gap.  While Mr. Smith initially properly reported the provided housing as income, he later got mixed up with some super aggressive tax advisors who convinced him to amend his returns to exclude the housing.  His tax advisors told him he could do that under §911, even though that reneged a Closing Agreement he had signed.  That bum advice gave us Lesson From The Tax Court: The Finality Of Closing Agreements, TaxProf Blog (Sept. 12, 2022).  Today, Judge Toro examines and rejects Mr. Smith’s alternative loser argument that he could exclude housing allowance payments under §119.  Details below the fold.

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January 23, 2023 in Bryan Camp, New Cases, Scholarship, Tax, Tax Scholarship | Permalink | Comments (2)

Sunday, January 22, 2023

The Top Five New Tax Papers

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

  1. SSRN Logo (2018) [325 Downloads]  State Strategic Responses to the GloBE Rules, by Heydon Wardell-Burrus (Oxford) (reviewed by David Elkins (Netanya; (Google Scholar) here)
  2. [185 Downloads]  Textualism, The Role And Authoritativeness Of Tax Legislative History, And Stanley Surrey, by George Yin (Virginia) (reviewed by Sloan Speck (Colorado; Google Scholar) here)
  3. [98 Downloads]  Multistate Business Entities, by Andrew Appleby (Stetson; Google Scholar) & Tomer Stein (Stetson)
  4. [84 Downloads]  The (Uncertain) Future of Corporate Tax Shelters, by Joshua Blank (UC-Irvine; Google Scholar) & Ari Glogower (Northwestern; Google Scholar) (reviewed by Michelle Layser (San Diego; Google Scholar) here)
  5. [81 Downloads]  Is the U.S. Already Compliant with Pillar 2?, by Reuven Avi-Yonah (Michigan; Google Scholar)

January 22, 2023 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink

Friday, January 20, 2023

Weekly SSRN Tax Article Review And Roundup: Kim Reviews Solving The Valuation Challenge: The ULTRA Method For Taxing Extreme Wealth By Galle, Gamage & Shanske

This week, Young Ran (Christine) Kim (Cardozo; Google Scholar) reviews Brian D. Galle (Georgetown; Google Scholar), David Gamage (Indiana Maurer; Google Scholar), & Darien Shanske (UC Davis; Google Scholar), Solving the Valuation Challenge: The ULTRA Method for Taxing Extreme Wealth, 72 Duke L.J. __ (2023).

Kim (2023)It is well known that our income tax system is based on a realization approach which avoids valuation problems but enables the rich to pay little in taxes. Brian Galle (Georgetown), David Gamage (Indiana), and Darien Shanske (UC Davis) address this inequality brilliantly in their article Solving the Valuation Challenge: The ULTRA Method for Taxing Extreme Wealth, 72 Duke L.J. __ (forthcoming 2023). To solve the valuation problem, they propose that governments take payments from the rich by receiving notional equity interests, called "ULTRAs." ULTRA stands for unliquidated tax reserve accounts and is similar to a government claim on a portion of the stock of a business. 

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January 20, 2023 in Christine Kim, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

McCaffery Presents The Paradox Of Taxing The Rich Today At Florida

Mccaffery at florida
Edward McCaffery
(USC; Google Scholar) presents The Paradox of Taxation the Rich at Florida today as part of its Tax Colloquium Series hosted by Charlene Luke:

In the Summer of 2021, stories broke across the mainstream American media that the wealthiest Americans, such as Jeff Bezos and Elon Musk, were paying no income taxes, perfectly legally, under the simple tax-planning advice to Buy, Borrow, Die. By the Fall, politicians were running out proposals to address the embarrassment, such as Senator Ron Wyden’s “Billionaire’s Tax.” Yet just a year later, in the Summer of 2022, as President Joe Biden and his fellow Democrats were trying to salvage some semblance of Biden’s once-ambitious “Build Back Better” agenda prior to the Congressional midterm elections, came word that little would be done to reverse course on recent and longstanding American tax policy: There would be only modest and largely symbolic tax increases on the rich, and no change at all to any of the planks of Buy, Borrow, Die.

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January 20, 2023 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink

Next Week’s Tax Workshops

Tax Workshops (Big)

Monday, January 23: Jonathan H. Choi (Minnesota; Google Scholar) will present Subjective Costs of Taxation as part of the Florida Marshall M. Criser Distinguished Faculty Workshop. If you would like to attend, please RSVP here

Tuesday, January 24: Shayak Sarkar (UC-Davis; Google Scholar) will present Capital Migration as part of the UC-San Francisco Tax Policy Colloquium. If you would like to attend, please contact Manoj Viswanathan.

Tuesday, January 24: Amanda Parsons (Colorado; Google Scholar) will present The Shifting Economic Allegiance Of Capital Gains as part of the Columbia Davis Polk & Wardwell Tax Policy Colloquium. If you would like to attend, please contact David Schizer.

Wednesday, January 25: Susie Morse (Texas; Google Scholar) will present Out of Time: APA Challenges to Old Tax Guidance and the Six-Year Default Limitations Period as part of the Northwestern Advanced Topics in Taxation Colloquium. If you would like to attend, please contact Gregg Polsky

Thursday, January 26: Jan Brueckner (UC-Irvine; Google Scholar) will present Taxes and Telework: The Impacts of State Income Taxes in a Work-from-Home Economy (with David R. Agrawal (Kentucky; Google Scholar)) as part of the UCLA Colloquium on Tax Policy and Public Finance. If you would like to attend, please contact Kirk Stark or Jason Oh

Thursday, January 26: Ruth Mason (Virginia; Google Scholar) will present Bibb Balancing, 91 Geo. Wash. L. Rev. __ (2023) (with Michael S. Knoll (Penn)) as part of the OMG Transatlantic Tax Talks. No RSVP is required for this event. 

Thursday, January 26: Yariv Brauner (Florida; Google Scholar) will present Taxation of Information and the Data Revolution as part of a celebration of his academic contributions and appointment to Hugh Culverhouse Eminent Scholar Chair in Taxation. If you would like to attend, please contact Charlene Luke.

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January 20, 2023 in Colloquia, Legal Education, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink

Thursday, January 19, 2023

Zhang: Antidiscrimination And Tax Exemption

Alex Zhang (Law Clerk, U.S. States Court of Appeals for the Ninth Circuit; J.D. 2021, Yale), Antidiscrimination and Tax Exemption, 107 Cornell L. Rev. 1381 (2022):

Cornell Law Review LogoThe Supreme Court held, in Bob Jones University v. United States, that violations of fundamental public policy—including race discrimination in education—disqualify an entity for tax exemption. The holding of the case was broad, and its results cohered with the ideals of progressive society: the government ought not to subsidize discrimination, in particular of marginalized groups. But almost four decades later, the decision has never realized its liberal, antidiscriminatory potential. The IRS has limited implementation to the narrowest facts of the case. The scholarly literature has not formulated a systematic account of how to enforce the Bob Jones regime, in light of the expansion of antidiscrimination protections and the Court’s reasoning that is deeply rooted in common-law charity. At the same time, tax-exempt entities engage in a smattering of discriminatory activities, often with impunity.

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January 19, 2023 in Scholarship, Tax, Tax Scholarship | Permalink

Dooling & Hickman: Applying The Regulatory Report Card To Tax Regulations

Bridget C.E. Dooling (George Washington; Google Scholar) & Kristin E. Hickman (Minnesota; Google Scholar), Applying the Regulatory Report Card to Tax Regulations:

An invited contribution to an issue of the Journal of Benefit-Cost Analysis honoring the work of the late Dr. Jerry Ellig, this essay recognizes and draws upon the Regulatory Report Card methodology developed by Ellig and Patrick McLaughlin to evaluate the quality of regulatory impact analysis published by federal government agencies in conjunction with notice-and-comment rulemaking. The essay anticipates a forthcoming study of changes to tax regulatory practices as a result of a 2018 Memorandum of Agreement between the Treasury Department and the Office of Information and Regulatory Affairs--a study the authors discussed and hoped to conduct with Ellig before he passed away. 

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January 19, 2023 in Scholarship, Tax, Tax Scholarship | Permalink

Raghavan: The Case Against The Debt Tax

Vijay Raghavan (Brooklyn), The Case Against the Debt Tax, 91 Fordham L. Rev. __ (2023):

Fordham law reviewAmericans are increasingly agitating for debt relief. In the last decade, there have been national campaigns to cancel student debt, credit card debt, and mortgage debt. These national campaigns have paralleled local efforts to cancel taxi medallion debt, carceral debt, and lunch debt. But as the public increasingly pursues broad-scale debt relief outside bankruptcy, they face an important institutional obstacle: cancelled debt is generally taxable.

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January 19, 2023 in Scholarship, Tax, Tax Scholarship | Permalink

Wednesday, January 18, 2023

Eyal-Cohen: The (Tax) Policy Entrepreneur

Mirit Eyal-Cohen (Alabama; Google Scholar), The (Tax) Policy Entrepreneur, 86 Law & Contemp. Probs. __ (2023):

Duke law and contemporary problemsThe construct of entrepreneurship represents a mindset and strategy for utilizing uncertainties to create change in the marketplace. This essay, however, considers entrepreneurship in the context of government policy apparatus. Termed “policy entrepreneurship,” the phenomenon is not concerned with recruiting lawmakers to pass legislation or develop a political economic strategy, but is practiced by advocating for optimal policy outcomes via the legislative process. It entails crafting rules and shaping public programs while maintaining flexibility and harnessing political, administrative, and legal forces to advance public-benefit agendas.

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January 18, 2023 in Scholarship, Tax, Tax Scholarship | Permalink

Soled & Alm: Is A Tax-Motivated Bonanza Of Electric Vehicle Gifts On The Horizon?

Jay A. Soled (Rutgers; Google Scholar) & James Alm (Tulane; Google Scholar), Is a Bonanza of Electric Vehicle Gifts on the Horizon?, 178 Tax Notes Fed. 257 (Jan. 9, 2023):

Tax Notes Federal (2022)In this article, Soled and Alm argue that some provisions of the Inflation Reduction Act could encourage taxpayers to make automobile-related gifts, not out of generosity but as part of a strategy designed to achieve significant income tax savings. ...

Conclusion
In light of taxpayers’ tendencies to make the most of available tax-saving opportunities, automobile gift-giving may soon become a trend. This phenomenon would subvert the IRA’s legislative intent of having the clean vehicle credit accrue to taxpayers of moderate economic means, and it would cost the treasury lost revenue and undermine taxpayer confidence in the tax system.

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January 18, 2023 in Scholarship, Tax, Tax Analysts, Tax Scholarship | Permalink

Tuesday, January 17, 2023

Morse Reviews Wilking's Independent Contractors In Law And In Fact

Susan Morse (Texas; Google Scholar), Terms of Employment (JOTWELL) (reviewing Eleanor Wilking (Cornell), Independent Contractors in Law and in Fact: Evidence from U.S. Tax Returns, 117 Nw. U. L. Rev. 731 (2022):

Jotwell (2023)Under tort and agency common law, the more control a firm exerts over its workers, the more likely that workers will be classified as employees rather than independent contractors. The need to determine control prompts a line-drawing exercise and offers opportunities for firms and/or workers to manipulate the result, rather than choosing the best abstract analysis on the facts. In Independent Contractors in Law and in Fact: Evidence from U.S. Tax Returns, Eleanor Wilking constructs a huge tax-return-based dataset and uses it to show that firms appear to game the employee/independent contractor distinction, that evidence of manipulation is stronger when lower-income workers are involved, and that the tendency to classify workers as independent contractors has likely increased over time.

A lot turns on whether a worker is an “employee.” Access to retirement plans, health insurance, certain government benefits and antidiscrimination protections follow from employee status. Tax, tort, contract, intellectual property and other legal results often differ based on whether a worker is an employee. Most, although not all, legal features require firms to offer more protections and benefits for employees, as opposed to independent contractors. Thus a firm’s incentive to manipulate generally tilts towards independent contractor classification, holding all else equal, particularly for lower-income workers.

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January 17, 2023 in Scholarship, Tax, Tax Scholarship | Permalink

Blue J Predicts: Conflicting Duties And The Trust Fund Recovery Penalty

Benjamin Alarie (Osler Chair in Business Law, University of Toronto; CEO, Blue J Legal) & Ann Velez (Senior Legal Research Associate, Blue J Legal), Cashaw: Conflicting Duties and the Trust Fund Recovery Penalty, 177 Tax Notes Fed. 1257 (Nov. 28, 2022):

Tax Notes Federal (2022)Employers in the U.S. are required to help the federal government in its tax administration endeavors by periodically withholding and remitting employees’ payments for income taxes, Social Security, and Medicare. That duty is special: Under section 7501(a), employers hold employee payroll tax withholdings in trust for the United States. For this reason, payroll withholdings are sometimes referred to as “trust fund taxes.” One of the tools the IRS uses to collect withholdings when employers fail to remit them on time (or at all) is the trust fund recovery penalty (TFRP).

A person can be found responsible and willful for failure to remit even if they were neither a director nor an officer of the employer. And a person can be saddled with TFRP liability even if they experienced a conflict between the duty to remit taxes and other duties, such as obedience to their employer, obligations under state law, their professional code of conduct, or their moral convictions. Litigated TFRP cases frequently reflect these kinds of challenging circumstances. Cashaw [v. Commissioner, T.C. Memo. 2021-123 (Oct. 27, 2021)], is no exception. In October 2021 the Tax Court, while expressing sympathy for Pamela Cashaw’s situation as an administrator of a cash-strapped hospital, noted that it was a court of law, not equity, and ruled that she must be held personally liable for the TFRP in the approximate amount of $173,000. The case has been appealed to the Fifth Circuit.

We assess Cashaw’s prospects on appeal.

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January 17, 2023 in Scholarship, Tax, Tax Analysts, Tax Scholarship | Permalink

Monday, January 16, 2023

Americans Moved To Low-Tax States In 2022

Following up on my previous post, New U.S. Census Data: Major Migration From Blue States To Red States:  Tax Foundation, Americans Moved to Low-Tax States in 2022:

Americans were on the move in 2022 and chose low-tax states over high-tax ones. That’s the finding of recent U.S. Census Bureau population data and commercial datasets released this week by U-Haul and United Van Lines. ...

This population shift paints a clear picture: people left high-tax, high-cost states for lower-tax, lower-cost alternatives.

7 of the 10 states with the most outbound migration voted for Joe Biden in 2020, and 8 of the 10 states with the most inbound migration voted for Donald Trump.Tax Foundation (011523)

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January 16, 2023 in Scholarship, Tax, Think Tank Reports | Permalink

Invitation: ABA Virtual Tax Book Club On Tax Law And The Environment

Tax Law and the EnvironmentThe next virtual meeting ABA Tax Policy and Simplification Committee Book Club will have its next meeting on Thursday, January 26, 2023 from 3:00 - 4:00 p.m. ET (registration). The book to be discussed is Tax Law and the Environment: A Multidisciplinary and Worldwide Perspective (Roberta F. Mann (Oregon) & Tracey M. Roberts (Samford) eds. 2020):

Tax Law and the Environment: A Multidisciplinary and Worldwide Perspective takes a multidisciplinary approach to explore the ways how tax policy can is used solve environmental problems throughout the world, using a multi-jurisdictional and multidisciplinary approach. Environmental taxation involves using taxes to impose a cost on environmentally harmful activities or tax subsidies to provide preferred tax treatment to more sustainable alternatives to those harmful activities. This book provides a detailed analysis of environmental taxation, with examples from around the world. As the extraction, processing and use of energy use resources is has been a major cause of environmental harm, this book explores the taxation and subsidization of both fossil fuels and renewable energy. Its analysis of the past, present, and future potential of environmental taxation will help policymakers move economies toward sustainability, as well as and informing students, academics, and citizens about tax solutions for pressing environmental issues.

Reviews:

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January 16, 2023 in ABA Tax Section, Book Club, Scholarship, Tax, Tax Scholarship | Permalink

Sunday, January 15, 2023

Hofmann: The Politics Of Religion And Taxation: Keeping Church And State Separate

Mary Ann Hofmann (Appalachian; Google Scholar), The Politics of Religion and Taxation: Keeping Church and State Separate, 22 J. of Mgmt. Pol'y & Prac. 31 (2021):

This paper discusses tax laws and federal court decisions relating to the taxation or exemption of religious non-profit organizations. In a democracy characterized by separation of church and state, what role does the federal government play in regulating the activities and financial transactions of churches and other religious non-profit organizations? What are the federal statutory requirements regarding tax exemption for churches, tax deductibility of donations to churches, and political activity by churches, and are these requirements justified? Does this regulation interfere with the free exercise of religion, or does the federal government violate the establishment clause of the First Amendment by providing inappropriate tax benefits to churches and clergy?

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January 15, 2023 in Faith, Legal Ed Scholarship, Legal Education, Scholarship | Permalink

The Top Five New Tax Papers

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

  1. SSRN Logo (2018) [301 Downloads]  State Strategic Responses to the GloBE Rules, by Heydon Wardell-Burrus (Oxford) (reviewed by David Elkins (Netanya; (Google Scholar) here)
  2. [254 Downloads]  Legal Structuring of Web Based Trading and Tax Complexities in Pakistan A Comparative Study, by Shan Ali (Bahria University Islamabad), Asadullah Muhmand (Bahria University Islamabad; Google Scholar); Faheem Raza Khuhro (Boston University)
  3. [167 Downloads]  Textualism, The Role And Authoritativeness Of Tax Legislative History, And Stanley Surrey, by George Yin (Virginia) (reviewed by Sloan Speck (Colorado; Google Scholar) here)
  4. [108 Downloads]  The Commerciality Of Non-Profit Hospitals Requires Them To Be Taxed, by Edward Zelinsky (Cardozo)
  5. [87 Downloads]  Multistate Business Entities, by Andrew Appleby (Stetson; Google Scholar) & Tomer Stein (Stetson)

January 15, 2023 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink