Paul L. Caron
Dean


Friday, July 19, 2019

Weekly SSRN Tax Article Review And Roundup: Speck Reviews Nagato's Tax Consequences Of The Fukushima Nuclear Disaster

This week, Sloan Speck (Colorado) reviews a new work by Takayuki Nagato (Gakushuin University, Faculty of Law), Tax Losses and Excessive Risk Taking Under Limited Liability: A Case Study of the TEPCO Bailout After the Fukushima Nuclear Disaster, 32 Colum. J. Asian L. 137 (2019).

Speck (2017)On March 11, 2011, an earthquake and subsequent tsunami devastated the Fukushima Dai-ichi nuclear power plant, which lies roughly 150 miles north of Tokyo on Japan’s eastern coast. The Fukushima nuclear disaster caused tremendous and far-reaching economic—and, of course, personal—losses. By statute, the operator of the Fukushima plant, Tokyo Electric Power Company Holdings (TEPCO), was held strictly liable for approximately $80 billion of damages that stemmed from the disaster. In a compelling recent article, Takayuki Nagato explores the tax consequences of TEPCO’s damage payments as a vehicle to interrogate the treatment of tax losses and risk-taking more generally. Nagato’s excellent and engaging analysis also adds a parallel strand to scholarly conversations about taxation’s direct and indirect role in disaster relief, as well as current commentaries on Pacific Gas & Electric’s wildfire-driven bankruptcy.

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July 19, 2019 in Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Avi-Yonah Posts Tax Papers On SSRN

Behavioral Biases and Political Actors: Three Examples from US International Taxation (with Kaijie Wu):
The literature on behavioral public finance has tended to focus on the biases of taxpayers. However, politicians and government agents are human as well and can be expected to show the same biases that we are all subject to. This chapter will examine three examples of availability heuristic arguably influencing political actors and the unintended consequences of their reactions. The examples are all from US international tax rules: the foreign investment in real property tax act (FIRPTA) (1980), the exit tax on US citizens who expatriate (2008) and the enforcement of withholding tax on dividend equivalents (2010).

A Break in the Dam? India’s New Profit Attribution Proposal and the Arm’s Length Standard (with Ajitesh Kir):
On April 18, 2019, the Indian Central Board of Direct Taxes released a public consultation document on amending India’s rules for profit attribution to permanent establishments. This remarkable document is the first time a national government has proposed what in essence amounts to an abandonment of the arm’s length standard (ALS), the governing standard in transfer pricing for over 80 years, in favor of a formulary system. Given that the OECD has also raised the option of using formulas to allocate profits to market jurisdictions, India’s unilateral move may signal the proverbial break in the ALS dam, with the potential of leading to an abandonment of the ALS in favor of a unitary tax system.

Stanley Surrey, the Code and the Regime (with Nir Fishbien and Gianluca Mazzoni):

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July 19, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Thursday, July 18, 2019

Cauble: Taxing Selling Partners

Emily Cauble (DePaul), Taxing Selling Partners, 94 Wash. L. Rev. 1 (2019) (reviewed by Sloan Speck  (Colorado) here):

Under current law, when a partner sells a partnership interest, the resulting gain or loss is treated as capital gain or loss, except to the extent that the partnership holds certain items whose sale would result in gain or loss that was not capital. The purpose of the current regime appears to be to prevent taxpayers from obtaining more favorable treatment by selling an interest in a partnership than what would result if the partnership were to sell its underlying assets. Given this apparent aim of legislators, current law produces results for taxpayers that are both unduly favorable and unduly unfavorable. In particular, despite current law’s aim to equate the tax treatment of the sale of a partnership interest with the tax treatment of the sale of underlying assets (at least with respect to the character of income recognized), differences persist. Sometimes sale of a partnership interest produces more favorable tax treatment than the sale of underlying assets. Other times, sale of a partnership interest triggers less favorable tax treatment than a sale of underlying assets.

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July 18, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Minimal IRS Guidance Is Sufficient To Navigate § 1400Z Opportunity Zones

Riley Coy, Good Enough: How Minimal IRS Guidance is Sufficient to Navigate §1400Z Opportunity Zones, 3 J. Bus. Entrepreneurship & L. 1 (2019):

Z, as part of the Tax Cuts and Jobs Act, creates “Opportunity Zones” which provide investors with a tax incentive to invest their realized capital gains in certain distressed neighborhoods. The goal of this subchapter is the economic growth of these communities. As described below, the language of subchapter Z is subject to interpretation in certain respects. Subsequently, the IRS issued a proposed regulation to provide guidance and clarity to the ambiguities within the language. Although many issues still remain unresolved, the guidance provided is a significant step in the right direction.

July 18, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Manolakas: The Tax Law And Policy Of Natural Disasters

Christine Manolakas (McGeorge), The Tax Law and Policy of Natural Disasters, 71 Baylor Law Rev. 1 (2019):

Natural disasters result in untold human suffering and economic loss. In addition to possible physical injury and loss of life, the futures of the individuals involved are forever altered. Homes and neighborhoods are destroyed, families and communities are dislocated, and jobs and businesses are jeopardized. Unconscionably, Tax Cuts and Jobs Act of 2017 further diminished the already inadequate tax relief available for the damage or destruction of personal-use property caused by casualty events. Following a general discussion of the tax laws applicable to casualty losses, including changes made by the Tax Cuts and Jobs Act of 2017, this article surveys the permanent tax relief provisions available to the victims of all natural disasters and the additional permanent tax relief provisions available only to the victims of Federally declared disasters.

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July 18, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Christians & van Apeldoorn: The OECD Inclusive Framework

Allison Christians (McGill) & Laurens van Apeldoorn (Leiden), The OECD Inclusive Framework:

OECDNations across the world are engaged in an ambitious project of tax cooperation that contemplates all participating nations included on an equal footing to implement and further develop mutually agreed baseline rules. The forum for this vision of equal participation in international tax policymaking is the Inclusive Framework, an inter-governmental network convened by the Organisation for Economic Cooperation and Development. This paper demonstrates that the design and build-out of the Inclusive Framework demonstrates institutional learning about the need for inclusivity in authenticating a global tax policy mandate, and that achieving stated goals will be challenging in both logistical and geo-political terms.

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July 18, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (2)

Wednesday, July 17, 2019

Expanding OIRA Review To The IRS

Bridget C.E. Dooling (George Washington), Expanding OIRA Review to IRS, 3 J. Bus. Entrepreneurship & L. ___ (2019):

Executive Order 12866 describes U.S. policy on regulatory planning and review. It directs agencies to identify the nature and significance of the problem they are trying to solve with regulation, to identify alternative solutions, to assess the quantifiable and non-quantifiable costs and benefits of each alternative, and then to choose the option that maximizes net benefits to society, taking into account distributional effects and other considerations. That policy, which has governed U.S. regulation for several decades, is managed by the Office of Information and Regulatory Affairs (OIRA). It is also subject to several exemptions. In April 2018, the U.S. Department of Treasury and the Office of Management and Budget signed a historic memorandum of agreement (MOA) narrowing one of those exemptions. The MOA expands the number of Internal Revenue Service (IRS) regulatory actions for which IRS must comply with EO 12866. This action moved tax rules out of the “presidential tax-policy blind spot” as described by Professor Clint Wallace [Centralized Review of Tax Regulations, 70 Ala. L. Rev. 455, 460 (2018)].

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July 17, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Tuesday, July 16, 2019

Rethinking Normative Principles In International Tax

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

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

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July 16, 2019 in ABA Tax Section, Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Min & Kim: Dual-Class Stock And Corporate Spin-offs

Geeyoung Min (Columbia) & Young Ran (Christine) Kim (Utah), Insulation by Separation: When Dual-Class Stock Met Corporate Spin-offs, 9 UC Irvine L. Rev. ___ (2019):

The recent rise of shareholder engagement has revamped companies’ corporate governance structures so as to empower shareholder rights and to constrain managerial opportunism. Notwithstanding the general trend, this Article uncovers corporate spin-off transactions — which divide a single company into two or more companies — as a unique mechanism that insulates the management from shareholder intervention. In a spin-off, the company’s managers can fundamentally change the governance arrangements of the new spun-off company without being subject to monitoring mechanisms, such as shareholder approval or market check. Those changes often empower managers over shareholders. Furthermore, most spin-off transactions enjoy tax benefits. The potential agency problems associated with the managers’ unilateral governance changes can be further compounded when the managers adopt multiple classes of common stock with unequal voting rights (“dual-class stock”) in the new spun-off company without shareholder approval.

This is the first Article to systematically examine the problem from both corporate and tax law perspectives and to offer possible solutions.

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July 16, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

U.S. Investment Since The Tax Cuts And Jobs Act Of 2017

Emanuel Kopp, Daniel Leigh, Susanna Mursula & Suchanan Tambunlertchai (IMF), U.S. Investment Since the Tax Cuts and Jobs Act of 2017:

There is no consensus on how strongly the Tax Cuts and Jobs Act (TCJA) has stimulated U.S. private fixed investment. Some argue that the business tax provisions spurred investment by cutting the cost of capital. Others see the TCJA primarily as a windfall for shareholders. We find that U.S. business investment since 2017 has grown strongly compared to pre-TCJA forecasts and that the overriding factor driving it has been the strength of expected aggregate demand. Investment has, so far, fallen short of predictions based on the postwar relation with tax cuts. Model simulations and firm-level data suggest that much of this weaker response reflects a lower sensitivity of investment to tax policy changes in the current environment of greater corporate market power. Economic policy uncertainty in 2018 also subdued investment growth, although to a lesser extent.

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July 16, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Monday, July 15, 2019

Lesson From The Tax Court: Effect Of Lump Sum SSI Election On Premium Tax Credit

Tax Court (2017) Last year I blogged about one unhappy feature of the Affordable Care Act (ACA):  §36B has no wiggle room in it to deal with reasonable taxpayer errors in calculating their Premium Tax Credit (PTC).  As a result, taxpayers sometimes get hit with really big deficiencies, even when the error is someone else’s fault.

Section 36B(f)(2)(B) tries to limit the harshness.  For families whose income is less than 400% of the relevant poverty line, that provision puts a cap on how much an error will cost them.  But that is no help to families who are just outside of the 400% threshold.  Nor does the law permit the Tax Court or the IRS to distinguish between good faith errors and taxpayer negligence.  I like how Christine Speidel put it in this post: “The problem for taxpayers hoping to avoid strict reconciliation is that section 36B simply does not have a mechanism to consider equity in the reconciliation of APTC.”

The good folks at Procedurally Taxing have really been on top of this §36B problem.  Here’s a list of their blog posts on the subject.  In particular, Christine Speidel has a good summary of the law here, and Samantha Galvin illustrates two recent §36B cases here

Two recent Tax Court decisions reveal a new dimension to §36B harshness: it’s interplay with the lump-sum SSI election in §86(e).  In Charles W. Monroe and Rebecca A. Monro v. Commissioner, T.C. Memo. 2019-41 (Apr. 24, 2019) (Judge Ruwe), and in Levon Johnson v. Commissioner, 152 T.C. No. 6 (Mar. 11, 2019) (Judge Gerber), the question was whether an SSI lump sum catch-up payment had to be counted in calculating PTC eligibility when the taxpayers had made an election under §86(e) to reallocate the lump-sum payment from current year into prior years.  The Court looked at the text of §36B and said “yep, gotta include the lump sum.” 

I doubt the Court enjoyed coming to its conclusion because the harsh result turns the tax law into a “gotcha” game that even reasonable taxpayers will lose.  But if you learn the lesson these cases teach, you can at least help your clients who are in similar situations. 

There was an alternative interpretation here, however, that practitioners might press upon the Tax Court in future cases.  A closer look at the §36B language suggests it may well have room for a different "plain language" interpretation consistent with the §86(e) policy.  While the Court's holding was not unreasonable, neither was was it desirable, and it was sure as heck not inevitable.  Details below the fold.

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July 15, 2019 in Bryan Camp, New Cases, Scholarship, Tax | Permalink | Comments (6)

Sunday, July 14, 2019

Lawyers Serving Gods, Visible And Invisible

Jonathan R. Cohen (Florida), Lawyers Serving Gods, Visible and Invisible, 53 Gonz. L. Rev. 187 (2017):

Abstract. A critique of the American legal profession can be framed through the metaphor of idolatry, specifically the proclivity of lawyers to serve visible rather than invisible interests in their work. This proclivity has ramifications ranging from broad matters like lawyers' responses to deeply embedded social injustices to specific matters such as the excessive focus on pecuniary interests in ordinary legal representation and the high level of dissatisfaction that many lawyers experience in their careers. Using as a lens biblical teaching concerning idolatry, this article begins by describing "visible" as opposed to "invisible" interests in the context of legal practice. It then argues that lawyers, clients, and ultimately society could benefit from lawyers paying greater attention to invisible interests.

Introduction. Religious ideas can sometimes offer a distinctive lens or vantage point for gazing upon ordinary life. For example, seeing a person as created "in God's image" may lead one to ask a different set of questions (e.g., is that person being treated with dignity?) and assert a different set of values (e.g., that human life is precious) than one might ask or assert without that religious metaphor. One need not, of course, invoke religious language to discuss subjects like human dignity and worth, but religious teachings can lend insights into them. Here I suggest that another fundamental religious teaching, namely the biblical prohibition against idolatry, provides a useful lens for critiquing the American legal profession. Akin to worshiping a visible rather than invisible God, many lawyers have a proclivity to focus on visible rather than invisible interests in their work. This proclivity has ramifications ranging from the "small" issue of low job satisfaction among lawyers, to the broader issue of the tendency of many lawyers to focus excessively on their clients' pecuniary rather than nonpecuniary interests, to the even broader issue of the failure of many lawyers to undertake the prophetic work of confronting deeply embedded social injustices.

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July 14, 2019 in Legal Ed Scholarship, Legal Education, Scholarship | Permalink | Comments (0)

Should Governments Tax The Rich And Subsidize The Poor? A Comparative Study Of Muslim And Christian Respondents

Robert W. McGee (Fayetteville State University), Serkan Benk (Inonu University, Turkey) & Bahadir Yuzbasi (Inonu University, Turkey), Should Governments Tax the Rich and Subsidize the Poor? A Comparative Study of Muslim and Christian Respondents:

This study used the most recent World Values Survey dataset to determine whether Christian and Muslim views on the acceptability of taxing the rich and subsidizing the poor was an essential feature of democracy. The sample size included more than 23,000 individuals from more than 50 countries. More than a dozen socioeconomic and attitudinal variables were also examined to determine whether significant differences existed. The study found that differences in viewpoint were often significant.

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July 14, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

The Top Five New Tax Papers

SSRN Logo (2018)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 a new paper debuting on the list at #4:

  1. [479 Downloads]  The President's Tax Returns, by Andy Grewal (Iowa)
  2. [222 Downloads]  A Tax Professor's Guide to Formative Assessment, by Heather Field (UC-Hastings)
  3. [179 Downloads]  Where Is the Opportunity in Opportunity Zones? Early Indicators of the Opportunity Zone Program’s Impact on Commercial Property Prices, by Alan Sage (MIT), Mike Langen (Maastricht University) & Alex Van de Minne (MIT)
  4. [150 Downloads]  Wayfair, What's Fair, and Undue Burden, by Michael Fatale (Massachusetts Department of Revenue)
  5. [138 Downloads]  The Supreme Court, Due Process and State Income Taxation of Trusts, by Bridget Crawford (Pace) & Michelle Simon (Pace)

July 14, 2019 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink | Comments (0)

Friday, July 12, 2019

Weekly SSRN Tax Article Review And Roundup: Layser Reviews Blank & Osofsky's Legal Calculators And The Tax System

This week, Michelle Layser (Illinois) reviews a new work by Joshua D. Blank (UC-Irvine) and Leigh Osofsky (North Carolina), Legal Calculators and the Tax System, 15 Ohio St. Tech. L.J. ___ (2019).

Layser (2018)

The IRS has long attempted to aid wary taxpayers by publishing informal guidance that translates tax laws into more understandable statements. In previous work, Professors Joshua Blank and Leigh Osofsky have argued that such plain language guidance often oversimplifies complicated tax laws, opening the door to errors. They have called this characteristic “simplexity.” In their newest article on the subject, Blank and Osofsky identify another—potentially more serious—example of tax guidance that reflects simplexity: automated legal calculators like the IRS’s Interactive Tax Assistant.

In the context of tax compliance, legal calculators are essentially algorithmically programmed, automated tax advisors that perform mathematical calculations and attempt to calculate taxpayers’ legal consequences. It sounds technical, but anyone who has ever used TurboTax is familiar with the basic concept. The legal calculator “asks” the user questions about their profile and economic activities, and then it generates advice about what income might be taxable, what deductions or credits may be available, whether it makes sense for a taxpayer to itemize, and so forth.

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July 12, 2019 in Michelle Layser, Scholarship, Tax, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Thursday, July 11, 2019

Buchanan: Tax Law Is The Lynchpin Of Civilization

Jotwell (Tax) (2016)Neil H. Buchanan (George Washington), The Law of Taxation Is the Lynchpin of Civilization (JOTWELL) (reviewing John Snape (Warwick) & Dominic de Cogan (Cambridge), Introduction: On the Significance of Revenue Cases, in Landmark Cases in Revenue Law 1 (John Snape & Dominic de Cogan eds. 2019):

John Snape and Dominic de Cogan, two legal scholars from universities in England, have provided a significant contribution to the emerging scholarly discussion in many different countries about the nature and limits of the law—not just tax law, which is their nominal domain in this chapter and book, but of all law. Without being at all polemical, and although they give a fair hearing to those with whom they disagree, they make an undeniable case for the claim that the study of tax law is ultimately the study of, to be honest, everything. ...

Snape and de Cogan’s edited volume is part of the Landmark Cases series, an analogue (which the editors readily acknowledge) to the Law Stories series in the United States that began with Tax Stories. Like its American counterpart, a Landmark Cases volume can serve as an avenue for understanding an area of the law through the study of a small canon of foundational legal decisions that continue to shape our understanding of that particular area of the law. ...

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July 11, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (7)

Wednesday, July 10, 2019

Symposium: Feminist Judgments — Rewritten Tax Opinions

Pittsburgh Tax Review (2017)The Pittsburgh Tax Review has published Symposium, Feminist Judgments: Rewritten Tax Opinions, 16 Pitt. Tax Rev. 115-208 (2019):

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July 10, 2019 in Scholarship, Tax, Tax Conferences, Tax Scholarship | Permalink | Comments (1)

Ring: International Tax Reform And Improved Wealth Distribution Across The Globe

Jotwell (Tax) (2016)Diane Ring (Boston College), A Path to International Tax Reform and Improved Wealth Distribution Across the Globe (JOTWELL) (reviewing Tarcísio Diniz Magalhães (International Bureau of Fiscal Documentation), What Is Really Wrong with Global Tax Governance and How to Properly Fix It, 10 World Tax J. (2018)):

Thomas Piketty’s work brought the reality of unequal distributions of wealth into mainstream media and popular discourse. In the tax world, the conversation now regularly turns to a consideration of whether and how the international tax regime contributes to existing patterns of wealth and income distribution across nations. Certainly, the tax norms and rules that shape the basic roadmap of international tax (including source, residence and permanent establishment provisions) contribute to existing distributions of wealth—and relatedly taxable income—across jurisdictions. Why do these patterns persist? And perhaps more importantly, what would it take for change?

recent article by Tarcísio Diniz Magalhães aims to develop answers to both questions.

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July 10, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Business Tax Symposium Today At Oxford

Oxford Business Tax (2019)The Centre for Business Taxation's annual three-day summer symposium concludes today at the Saïd Business School, University of Oxford (program):

Thiess Buettner (FAU), Sales and Price Effects of Pre-announced Consumption Tax Reforms: Microlevel Evidence from European VAT (with Boryana Madzharova (FAU))
Discussant: Paul Baker (Bath)

Chris Evans (New South Wales), Diagnosing the VAT Compliance Burden: A Cross-Country Assessment (with Richard Highfield, Binh Tran-Nam & Michael Walpole (New South Wales))
Discussant: Alice Pirlot (Oxford)

Enda Hargaden (Tennessee), Does Statutory Incidence Matter? Earnings Responses to Social Security Contributions (with Barra Roantree (Economic and Social Research Institute))
Discussant: Michael Stimmelmayr (ETH Zurich)

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July 10, 2019 in Scholarship, Tax, Tax Conferences, Tax Scholarship | Permalink | Comments (0)

Gianni: Partnership Audit Rules After The Final Regulations

Monica Gianni (California State University Northridge), Partnership Audit Rules: After the Final Regulations, 128 J. Tax'n 9 (June 2019):

As part of the Bipartisan Budget Act of 2015 (BBA), Congress repealed the TEFRA audit rules and the audit rules for electing large partnerships and replaced them with a new audit regime (the BBA audit rules). The BBA audit rules generally are effective for audits of partnership returns for tax years beginning after 2017. Although the TEFRA audit rules were enacted in 1982 to address issues with partnership audits, particularly tax shelters, they proved difficult to implement. In a 1990 report to Congress, the Internal Revenue Service (IRS) and the Treasury concluded that large partnership audits were an inefficient and time-intensive use of limited resources. The BBA audit rules address the deficiencies of the TEFRA audit rules through a centralized audit system that requires partnership adjustments to be determined at the partnership level and any tax attributable to the adjustments to be assessed and collected at the partnership level. The rules allow for a small-partnership opt-out and an elective alternative to “push out” the audit adjustments made and tax paid to the partners. The audit process is streamlined by limiting the right to notices and participation in the audit to one “partnership representative” who has the “sole authority” to act for the partnership in an audit.

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July 10, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Tuesday, July 9, 2019

Choi: The Substantive Canons Of Tax Law

Jonathan H. Choi (NYU), The Substantive Canons of Tax Law, 72 Stan. L. Rev. ___ (2019):

Anti-abuse doctrines in tax law have traditionally been formulated as multi-factor tests that weigh the facts of the taxpayer’s case but ignore the tax statute at issue. This approach has proven problematic: some judges import statutory considerations regardless, creating inconsistency and confusion, and some scholars criticize the doctrines as antitextual violations of the separation of powers.

This Article argues that anti-abuse doctrines should be considered substantive canons of construction, interpretive presumptions that can be rebutted by statutory text or purpose. This resolves apparent arbitrariness in the doctrines’ application as simply the rebuttal of presumptions and reconciles them to textualists as constitutionally permissible background norms. It also provides a framework to test the validity of disputed doctrines and allows them to be more flexible and intuitive.

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July 9, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Business Tax Symposium Today At Oxford

Oxford Business Tax (2019)The Centre for Business Taxation's annual three-day summer symposium continues today at the Saïd Business School, University of Oxford (program):

Katarzyna Bilicka (Utah State), Debt Shifting Restrictions and Reallocation of Debt (with Yaxuan Qi (City University of Hong Kong) & Jing Xing (Shanghai Jiao Tong))
Discussant: Tim Goodspeed (CUNY)

Jennifer Blouin (Pennsylvania), Double Trouble: How Much of U.S. Multinationals' Profits are Really in Tax Havens? (with Leslie Robinson (Dartmouth College))
Discussant: Travis Chow (Singapore Management University)

Jacob Goldin (Stanford), Ironing Out the Tax Code (with Edward Fox (Michigan))
Discussant: Anzhela Cedelle (Oxford)

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July 9, 2019 in Scholarship, Tax, Tax Conferences, Tax Scholarship | Permalink | Comments (0)

Johnson: No Orchard, No Capital Gain

Calvin H. Johnson (Texas), No Orchard, No Capital Gain, 72 Tax Law. 501 (2019):

ABA Tax LawyerAs a matter of principle, capital gain is the gain from invested capital or basis. If the taxpayer has no basis in something of value it sells, there is no capital gain.

The principle that capital gain is gain from capital is embedded in the ordinary English language meaning of “capital gain,” which reflects the long history of the English property system going back into feudal tenures. Property purchased by expenses charged to the income interest remains part of the income interest and does not become capital gain reserved for the next heir.

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July 9, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Monday, July 8, 2019

Tax Policy Conference Today At Cambridge

Cambridge Centre for Tax LawThe two-day Cambridge Tax Policy Conference hosted by the Centre for Tax Law kicks off today at the University of Cambridge.  U.S. Tax Profs presenting papers include:

Henry Ordower (St Louis), Immigration, Emigration, Fungible Labor and the Retreat from Progressive Taxation

Darien Shanske (UC-Davis), Public Finance and Tax Policy in the World of Goldilocks (or, a Theory of When a System of Public Finance Becomes Disgraceful)

Other U.S. Tax Profs chairing panels include:

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July 8, 2019 in Scholarship, Tax, Tax Conferences, Tax Scholarship | Permalink | Comments (0)

Could The Public Service Loan Forgiveness Program Be Retroactively Curtailed?

Gregory S. Crespi (SMU), Could the Benefits of the Public Service Loan Forgiveness Program Be Retroactively Curtailed?, 51 Conn. L. Rev. 1 (2019):

There is a sharp tension between the expectations that hundreds of thousands to millions of persons have or will have regarding their right to have their federal student loan debts forgiven under the Public Service Loan Forgiveness (“PSLF”) program and the legitimate public concerns regarding the large costs and regressive incidence of the PSLF program’s benefits. In 2017, the Trump Administration proposed abolishing the PSLF program for future federal Direct Loans, but this proposal was not adopted. A similar proposal was made in 2019 as part of the Administration’s fiscal 2020 budget proposal, with little chance of adoption. But given the large costs of the program, which I estimate will eventually rise to $12 billion per year or more as an estimated 200,000 people per year who currently have outstanding federal Direct Loans will eventually seek debt forgiveness, and given the regressively skewed incidence of its benefits in favor of relatively affluent mid-career doctors and lawyers, I think that there will be further legislative curtailment efforts made in 2020 or later by the Trump Administration or by members of Congress, this time perhaps a more aggressive proposal for retroactive elimination of the program, or at least a push for a tax law amendment to include this forgiven debt as taxable income as is now done for debts forgiven under the other federal income-based loan forgiveness plans.

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July 8, 2019 in Legal Ed Scholarship, Legal Education, Scholarship | Permalink | Comments (1)

Lesson From The Tax Court: When Does A Business Start?

Tax Court (2017)It takes money to make money.  Generally Congress allows taxpayers to deduct the money it takes from the money they make.  That’s the idea in §162.  But §162’s deceptively simple language----allowing a deduction for all “the ordinary and necessary expenses paid or incurred in carrying on a trade or business”---has gaps, to be filled by other statutes.  For example, §§183 and 212 apply the §162 idea to activities that are not a “trade or business” but still produce income and have associated costs.  And then there is that pesky timing issue: which costs are “expenses” that should be deducted in the current year and which costs should only allowed to be deducted over a longer period of time?  Sections 168(k) and 179 allow taxpayers to accelerate deductions of certain capital costs that otherwise would not qualify as “expenses” under §162’s simple language.

Section 195 deals with another gap:  how to treat the costs of starting a business.  Section 162 does not permit deductions until such time as the taxpayer is actually “carrying on” the business.  Section 195 allows taxpayers to reach back to the time before the business started and deduct their start up costs.  But to get to use §195 a taxpayer must actually start their business.  Last week’s case of Steven Austin Smith v. Commissioner, T.C. Sum. Op. 2019-12 (July 1, 2019) (Judge Vasquez) teaches a nice lesson about what it means to start a business.  There, the court found that a taxpayer was indeed carrying on his business even in a year where he had no sales income.  To be sure, he still lost because he was unable to substantiate his expenses.  There’s a bit of a lesson there as well.  But the main lesson is about when a business starts.

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July 8, 2019 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (4)

Business Tax Symposium Today At Oxford

Oxford Business Tax (2019)The Centre for Business Taxation's annual three-day summer symposium kicks off today at the Saïd Business School, University of Oxford (program):

Reuven Avi-Yonah (Michigan), Bridging the Red-Blue Divide: A Proposal for U.S. Regional Tax Relief (with Orli Avi-Yonah, Nir Fishbien, Gianluca Mazzoni & Haiyan Xu (Michigan))
Discussant: Jennifer Blouin (Pennsylvania)

Lucie Gadenne (Warwick), Taxation and Supplier Networks: Evidence from India (with Tushar K. Nandi (Center for Studies in Social Sciences) & Roland Rathelot (Warwick))
Discussant: Eddy Tam (Oxford)

Itai Grinberg (Georgetown), Stabilizing 'Pillar One': Corporate Profit Reallocation in an Uncertain Environment
Discussant: Michael Devereux (Oxford)

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July 8, 2019 in Scholarship, Tax, Tax Conferences, Tax Scholarship | Permalink | Comments (0)

Sunday, July 7, 2019

Aprill: 2019 Overview Of Tax Issues For Synagogues And Other Religious Congregations

Ellen P. Aprill (Loyola-L.A.), 2019 Overview of Tax Issues for Synagogues and other Religious Congregations:

The attached revises the guides for synagogues and other religions congregations that I posted in 2010. These new versions reflect applicable law as of June, 2019. They summarize the rules I have been most often asked in the many years I have given advice on these matters, primarily with the Jewish community. One guide is directed specifically at synagogues; the other to religious congregations generally. (I use the term “religious congregations” rather than “churches” to be more inclusive.)

In addition to an overview, each guide discusses: (a) requirements for setting compensation; (b) lobbying and campaign; (c) substantiation of charitable contributions; (d) charitable fundraising; (e) payroll taxes and withholding for clergy; (f) parsonage and housing allowances; and (g) discretionary funds.

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July 7, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

The Top Five New Tax Papers

SSRN Logo (2018)This week's list of the Top 5 Recent Tax Paper Downloads, is the same as last week's list:

  1. [508 Downloads]  International Effective Minimum Taxation – The GLOBE Proposal, by Joachim Englisch (University of Muenster) & Johannes Becker (University of Muenster)
  2. [469 Downloads]  The President's Tax Returns, by Andy Grewal (Iowa)
  3. [220 Downloads]  A Tax Professor's Guide to Formative Assessment, by Heather Field (UC-Hastings)
  4. [162 Downloads]  Where Is the Opportunity in Opportunity Zones? Early Indicators of the Opportunity Zone Program’s Impact on Commercial Property Prices, by Alan Sage (MIT), Mike Langen (Maastricht University) & Alex Van de Minne (MIT)
  5. [137 Downloads]  The Supreme Court, Due Process and State Income Taxation of Trusts, by Bridget Crawford (Pace) & Michelle Simon (Pace)

July 7, 2019 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink | Comments (0)

Saturday, July 6, 2019

Whitelashing: Black Politicians, Taxes, And Violence

Trevon Logan (Ohio State), Whitelashing: Black Politicians, Taxes, and Violence:

This paper provides the first evidence of the effect of tax policy on the likelihood of violent attacks against black politicians. I find a strong positive effect of local tax revenue on subsequent violence against black politicians. A dollar increase in per capita county taxes increases the likelihood of a violent attack by more than 25%. The result is robust to numerous economic, social, historical, and political factors. I also find that counties where black officeholders were attacked had the largest negative tax revenue changes between 1870 and 1880 and that violence against black politicians is unrelated to other forms of post-Reconstruction racial violence. This provides the first quantitative evidence that political violence at Reconstruction's end was related to black political efficacy.

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July 6, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Friday, July 5, 2019

Weekly SSRN Tax Article Review And Roundup: Kim Reviews Schön's How To Tax The Digitalized Economy

This week, Young Ran (Christine) Kim (Utah) reviews a new work by Wolfgang Schön (Max Planck), One Answer to Why and How to Tax the Digitalized Economy (June 2019).

KimTaxation of the digitalized economy is without a doubt the most important topic of international taxation in 2019. The G20 and the OECD have already released three documents this year—a Policy Note in January, a Public Consultation Document in February, and a Programme of Work to Develop a Consensus Solution in May—to follow up on the Action 1 of the BEPS Project (Addressing the Tax Challenges of the Digital Economy) released in 2015 and the interim report published in 2018. The February 2019 Public Consultation Document outlines three proposals under its consideration: 1) the User Participation Proposal, 2) the Marketing Intangibles Proposal, and 3) the Significant Economic Presence Proposal. The subsequent May 2010 Programme of Work categorized important differences in the prior three proposals into new nexus rules and new profit allocation rules. In consideration of the new profit allocation rules, the Programme of Work addressed several options under a number of different labels, including the modified residual profit split method, fractional apportionment method, distribution-based approaches, and so on.

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July 5, 2019 in Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Grinberg Presents Corporate Profit Reallocation In An Uncertain Environment Today At Oxford

GrinbergItai Grinberg (Georgetown) presents Stabilizing 'Pillar One': Corporate Profit Reallocation in an Uncertain Environment at the annual summer conference on Taxing the Digitalised Economy: Closing in on Reform (program) today at the Centre for Business Taxation at the Saïd Business School, University of Oxford:

This paper is about how the world reestablishes international tax order.

The paper focuses on the OECD’s work on profit reallocation and asks whether this multilateral effort can be successful in stabilizing the international tax system. The analysis centers on the current leading concepts for reallocating profit among jurisdictions under what is known as “Pillar One” of the OECD work programme. To analyze whether any Pillar One concept can be turned into a stable multilateral regime, it is necessary to specify certain elements of what a proposal to reallocate profits might entail. Accordingly, this paper sets out two strawman proposals. One strawman uses a “market intangibles” concept that explicitly separates routine and residual returns. The other strawman might be described, in current OECD parlance, as a “distribution-based” approach.

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July 5, 2019 in Colloquia, Scholarship, Tax, Tax Conferences, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Thursday, July 4, 2019

The Anatomy Of Tenure And Academic Survival In Legal Education

Stephen J. Leacock (Barry), Tenure Matters: The Anatomy of Tenure and Academic Survival in Legal Education, 45 Ohio N.U. L. Rev. 115 (2019):

This article is a modest journey into the universe of tenure in order to discover the components of its value to educational institutions and their faculty, and to effectively appraise this value. Very briefly, the article discusses the history and nature of tenure and then addresses factors implicated in its attainment and loss including litigation by applicants who were unsuccessful in the quest to acquire it in the first place. The criteria applied by educational institutions' evaluators in deciding whether to grant tenure, as well as matters pertinent to its retention, loss and legal measures attendant on these events are also discussed, analyzed and evaluated. After the introduction in Part I, Part II explores the origins of tenure, and Part III discusses the nature of tenure. Part IV analyzes its legal prerequisites and Part V discusses the procedures for earning an award of tenure as well as the concept of de facto tenure. Part VI concentrates on tenure's benefits to faculty members and Part VII acknowledges criticisms of tenure. Part VIII examines certain bases for termination of tenure.  Part IX is the conclusion. ...

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July 4, 2019 in Legal Ed Scholarship, Legal Education, Scholarship | Permalink | Comments (0)

Goldin & Reck: Revealed Preference Analysis With Framing Effects

Jacob Goldin (Stanford) & Daniel Reck (London School of Economics), Revealed Preference Analysis with Framing Effects:

In many settings, decision-makers’ behavior is observed to vary based on seemingly arbitrary factors. Such framing effects cast doubt on the welfare conclusions drawn from revealed preference analysis. We relax the assumptions underlying that approach to accommodate settings in which framing effects are present. Plausible restrictions of varying strength permit either partial- or point-identification of preferences for the decision-makers who choose consistently across frames. Recovering population preferences requires understanding the empirical relationship between decision-makers’ preferences and their sensitivity to the frame. We develop tools for studying this relationship and illustrate them with data on automatic enrollment into pension plans.

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July 4, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Wednesday, July 3, 2019

Yale: Mutual Fund Tax Overhang

Ethan Yale (Virginia), Mutual Fund Tax Overhang, 38 Va. Tax Rev. 397 (2019):

The built-in gain in a mutual fund’s portfolio is referred to as “tax overhang.” Tax is imposed on investors who buy shares in mutual funds with tax overhang even though the gain accrued before their investment. The consequence is accelerated tax, increasing the shareholders’ effective tax rate. This article (1) explains why this occurs and why it is a problem, (2) describes the magnitude of the problem, (3) describes and illustrates avoidance strategies funds use to avoid the bad effects of tax overhang, (4) argues that reform is warranted, and (5) describes and evaluates the options for reform.

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July 3, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

The Law Of High-Wealth Exceptionalism

Allison Anna Tait (Richmond), The Law of High-Wealth Exceptionalism, 71 Ala. L. Rev. ___ (2019):

No family is an island. But some families would like to be – at least when it comes to wealth preservation – and they depend on what this Article calls the law of high-wealth exceptionalism to facilitate their success. The law of high-wealth exceptionalism has been forged, over the years, from the twinned scripts of wealth management and family wealth law, both of which constitute high-wealth families as sovereign entities capable of self-regulation and deserving of exemption from the rules that govern ordinary-wealth families. Consequently, high-wealth families take advantage of complicated estate planning techniques and highly favorable wealth rules in order build walls around their family fortunes and construct bespoke governance systems. Hiding in plain sight, the law of high-wealth exceptionalism protects, privileges, and enables high-wealth families in their own particular form of organizational sovereignty.

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July 3, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

The Overhyped Rise Of Robot Lawyers

Milan Markovic (Texas A&M), Rise of the Robot Lawyers?, 61 Ariz. L. Rev. 325 (2019):

Robot Lawyer 2The advent of artificial intelligence has provoked considerable speculation about the future of the American workforce, including highly educated professionals such as lawyers and doctors. Although most commentators are alarmed by the prospect of intelligent machines displacing millions of workers, not so with respect to the legal sector. Media accounts and some legal scholars envision a future where intelligent machines perform the bulk of legal work, and legal services are less expensive and more accessible. This future is purportedly near at hand as lawyers struggle to compete with technologically-savvy alternative legal service providers.

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July 3, 2019 in Legal Ed Scholarship, Legal Education, Scholarship | Permalink | Comments (0)

Tuesday, July 2, 2019

Blank & Osofsky: Legal Calculators And The Tax System

Joshua D. Blank (UC-Irvine) & Leigh Osofsky (North Carolina), Legal Calculators and the Tax System, 15 Ohio St. Tech. L.J. ___ (2019):

When consumers have questions about companies’ services and products, whether medical insurance, airline tickets or home appliances, they almost always encounter automated agents and other forms of customer service technology. Increasingly, tax authorities have begun to offer online decision-making tools to provide guidance regarding the tax law to taxpayers. The IRS’s “Interactive Tax Assistant,” for instance, asks taxpayers personal questions and then delivers answers on topics such as whether gambling losses are deductible, self-employment tax is owed and exceptions to early IRA retirement account withdrawal penalties apply. These online tools can be described as “legal calculators”: they not only perform mathematical calculations, but they attempt to calculate taxpayers’ legal consequences as well.

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July 2, 2019 in Scholarship, Tax | Permalink | Comments (0)

Piketty, Yang & Zucman: Capital Accumulation, Private Property, And Rising Inequality In China, 1978–2015

Thomas Piketty (Paris School of Economics), Li Yang (Paris School of Economics) & Gabriel Zucman (UC-Berkeley), Capital Accumulation, Private Property, and Rising Inequality in China, 1978–2015, 109 Am. Econ. Rev. 2469 (July 2019):

We combine national accounts, surveys, and new tax data to study the accumulation and distribution of income and wealth in China from 1978 to 2015. The national wealth-income ratio increased from 350 percent in 1978 to 700 percent in 2015, while the share of public property in national wealth declined from 70 percent to 30 percent. We provide sharp upward revision of official inequality estimates. The top 10 percent income share rose from 27 percent to 41 percent between 1978 and 2015; the bottom 50 percent share dropped from 27 percent to 15 percent. China's inequality levels used to be close to Nordic countries and are now approaching US levels.

Piketty 10

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July 2, 2019 in Scholarship, Tax | Permalink | Comments (1)

Fishman: The New 1.4% Tax On Net Investment Income Of Colleges And Universities Is Politically Motivated And Fatally Flawed

Following up on yesterday's post, IRS Issues Guidance On New 1.4% Tax On Net Investment Income Of 40 Wealthy Colleges And Universities:  James J. Fishman (Pace), How Big Is Too Big: Should Certain Higher Educational Endowments' Net Investment Income Be Subject to Tax?, 28 Cornell J.L. & Pub. Pol'y 159 (2018):

Section 13701 of the 2017 Tax Reform Act created new Internal Revenue Code § 4968 that imposes a 1.4% excise tax on the net investment income of certain large private college and university endowments. The affected institutions must have at least 500 tuition-paying students during the preceding taxable year, provided more than 50% of its students are located in the United States, plus assets (other than assets used directly in carrying out the institution’s exempt purpose) with an aggregate fair market value at the end of the preceding taxable year equal to at least $500,000 per full-time or full-time equivalent student. Approximately twenty-seven to thirty-five colleges and universities are affected.

This paper argues that the legislation as enacted is politically motivated and fatally flawed. The “assets per student” ratio that triggers the tax is both over and under-inclusive, and irrelevant and arbitrary as a guide to excessive endowment accumulation. The legislation serves to exempt multi-billion dollar endowments of many universities yet ensnare smaller colleges that may have more limited resources, but the endowment to student ration exceeds $500,000.

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July 2, 2019 in Scholarship, Tax | Permalink | Comments (5)

Monday, July 1, 2019

Oh: The Distributional And Tax Planning Consequences Of The Tax Cuts And Jobs Act

Jason Oh (UCLA), The Distributional and Tax Planning Consequences of the Tax Cuts and Jobs Act (Testimony Before the House Ways & Means Committee (March 27, 2019)):

The TCJA was the most significant overhaul of the tax system in over three decades. It is commendable that this committee is evaluating how this law affects the American public. We are fortunate to have the projections of the Joint Committee on Taxation and various think tanks, but the sheer amount of data can be overwhelming. The goal of my testimony is to crystallize that data into five major takeaways. I pair each takeaway with a figure that captures the point visually.

Oh

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July 1, 2019 in Congressional News, Scholarship, Tax | Permalink | Comments (0)

Building A Culture Of Assessment In Law Schools

Larry Cunningham (St. John's), Building a Culture of Assessment in Law Schools, 69 Case W. Res. L. Rev. 395 (2018):

A new era of legal education is upon us: Law schools are now required to assess learning outcomes across their degrees and programs, not just in individual courses. Programmatic assessment is new to legal education, but it has existed in higher education for decades. To be successful, assessment requires cooperation and buy-in from faculty. Yet establishing a culture of assessment in other disciplines has not been easy, and there is no reason to believe that it will be any different in legal education. A survey of provosts identified faculty buy-in as the single biggest challenge towards implementing assessment efforts. This article surveys the literature on culture of assessment, including conceptual papers and quantitative and qualitative studies. It then draws ten themes from the literature about how to build a culture of assessment:

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July 1, 2019 in Legal Ed Scholarship, Legal Education, Scholarship | Permalink | Comments (0)

Call For Papers: University Of North Carolina Tax Symposium

UNC Tax CenterThe University of North Carolina Kenan-Flagler School of Business has issued a call for papers for its Twenty-Third Annual Tax Symposium to be held April 17-18, 2020. The symposium "is designed to bring together leading tax scholars from economics, accounting, finance, law, political science, and related fields." The deadline for the call for papers is December 15, 2019:

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July 1, 2019 in Scholarship, Tax, Tax Conferences | Permalink | Comments (0)

Lesson From The Tax Court: Yachts Are Pigs

.Tax Court (2017)You can put lipstick on a pig, but it’s still a pig.  According to Wikipedia, that is a late 20th century update to an older expression "A hog in armour is still but a hog.”  Both convey the same idea: superficial alterations do not change the essence of a thing.   

Two recent cases from the Tax Court teach a tax version of that lesson: no matter how much you dress up a yacht in a business suit, it’s still a pleasure boat.  First, in Carlos Langston and Pamela Langston v. Commissioner, T.C. Memo. 2019-19 (Mar. 21, 2019) (Judge Nega), we once again learn a lesson from the Langstons, the same taxpayers who tried to convince Judge Nega that they had converted their home into an income-producing asset.  That was the subject of this prior lesson.  Here, in the same case, they also tried to pass off a modest 58’ 2006 Meridian 580 yacht as a business asset.  I say "modest" advisedly because the second case is Charles M. Steiner and Rhoda L. Steiner v. Commissioner, T. C. Memo 2019-25 (April 2, 2019)(Judge Ruwe) and it involves a decidedly immodest 155’ Super Yacht called “Triumphant Lady.”  After the Steiners decided to sell that yacht they first tried to dress it up as a leasing venture to reduce their considerable carrying costs pending sale. 

Turns out, size did not matter.  Both taxpayers floundered on two of the several sharp shoals in the Tax Code that sink attempts to pass off pleasure boats as businesses.  Taxpayers lured by the siren song of tax breaks should learn the lessons you will find below the fold.

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July 1, 2019 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure | Permalink | Comments (1)

Sunday, June 30, 2019

The Top Five New Tax Papers

SSRN Logo (2018)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 #4:

  1. [488 Downloads]  International Effective Minimum Taxation – The GLOBE Proposal, by Joachim Englisch (University of Muenster) & Johannes Becker (University of Muenster)
  2. [454 Downloads]  The President's Tax Returns, by Andy Grewal (Iowa)
  3. [214 Downloads]  A Tax Professor's Guide to Formative Assessment, by Heather Field (UC-Hastings)
  4. [152 Downloads]  Where Is the Opportunity in Opportunity Zones? Early Indicators of the Opportunity Zone Program’s Impact on Commercial Property Prices, by Alan Sage (MIT), Mike Langen (Maastricht University) & Alex Van de Minne (MIT)
  5. [131 Downloads]  The Supreme Court, Due Process and State Income Taxation of Trusts, by Bridget Crawford (Pace) & Michelle Simon (Pace)

June 30, 2019 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, June 29, 2019

Tax, Inequality, And Human Rights

Tax  Inequality & Human Rights 2Tax, Inequality, and Human Rights (Philip Alston (NYU) & Nikki Reisch (NYU) eds. Oxford University Press 2019):

In Tax, Inequality, and Human Rights, experts in human rights law and in tax law debate the linkages between the two fields and highlight how each can help to tackle rapidly growing inequality in the economic, social, and political realms. Against a backdrop of systemic corporate tax avoidance, widespread use of tax havens, persistent pressures to embrace austerity policies, and growing gaps between the rich and poor, this book encourages readers to understand fiscal policy as human rights policy, and thus as having profound consequences for the well-being of citizens around the world. Prominent scholars and practitioners examine how the foundational principles of tax law and human rights law intersect and diverge; discuss the cross-border nature and human rights impacts of abusive practices like tax avoidance and evasion; question the reluctance of states to bring transparency and accountability to tax policies and practices; highlight the responsibility of private sector actors for shaping and misshaping tax laws; and critically evaluate domestic tax rules through the lens of equality and nondiscrimination. The contributing authors also explore how international human rights obligations should influence the framework for both domestic and international tax reforms. They address what human rights law requires of state tax policies and how tax laws and loopholes affect the enjoyment of human rights by people outside a state's borders. Because tax and human rights both turn on the relationship between the individual and the state, neo-liberalism's erosion of the social contract threatens to undermine them both.

Part I: The Relevance of Human Rights to Tax Law, Policy, and Practice
1. Nikki Reisch (NYU), Taxation and Human Rights: Mapping the Landscape
2. Olivier De Schutter (University of Louvain (Belgium)), Taxing for the Realization of Economic, Social and Cultural Rights
3. Sandra Fredman (Oxford), Taxation as a Human Rights Issue: Gender and Substantive Equality
4. Mitchell Kane (NYU), Tax and Human Rights: The Moral Valence of Entitlements to Tax, Sovereignty, and Collectives
5. Allison Christians (McGill), The Search for Human Rights in Tax

Part II: Tax Abuse in Global Perspective: Cross-Border Dimensions and International Responses

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June 29, 2019 in Book Club, Scholarship, Tax | Permalink | Comments (2)

Friday, June 28, 2019

Weekly SSRN Tax Article Review And Roundup: Kleiman Reviews Data Analytics And Tax Law

This week, Ariel Jurow Kleiman (San Diego) reviews a new work by University of Toronto faculty members Benjamin Alarie, Anthony Niblett, and Albert Yoon, Data Analytics and Tax Law.

StevensonWhether you fear or celebrate big data likely depends on your background, biases, experiences, and, perhaps most importantly, which systems you imagine the data to be benefitting.  Benjamin Alarie, Anthony Niblett, and Albert Yoon’s recent paper falls squarely on the celebrate side of the debate—at least in the context of tax administration—and persuasively invites the reader to join them there.  In this brief essay, the authors explore how tax agencies and taxpayers can harness data analytics and machine learning to improve tax administration for both government and taxpayers.

For government, data analytics can narrow the tax gap by improving fraud detection.  Specifically, tax agencies can mine taxpayer data to predict noncompliance ex ante, rather than uncovering the noncompliance ex post via audit.  Such predictions can inform resource allocations, allowing tax agencies to shift resources to high-risk sectors and companies.  Augmenting taxpayer data with information from other government agencies would improve these efforts.

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June 28, 2019 in Ariel Stevenson, Scholarship, Tax, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Kahn: The Tax Treatment Of Liability Insurance Coverage

Jeffrey H. Kahn (Florida State), The Tax Treatment of Liability Insurance Coverage, 163 Tax Notes 1381 (May 27, 2019):

If a taxpayer purchases automobile liability insurance and causes an accident that the insurer must cover, does the taxpayer have income in the amount of the coverage? The current law is clear that the taxpayer does not have income from the insurer’s payment or reimbursement of the insured. In a previous article [Hedging the IRS — A Policy Justification for Excluding Liability and Insurance Proceeds, 26 Yale J. Reg. 1 (2009)], I concluded that there was a policy justification for that treatment. Sachin S. Pandya and Stephen Utz have published an article [Designing the Tax Treatment of Litigation-Related Costs, 21 Fla. Tax Rev. 533 (2018)] in which they maintain that my prior conclusion and analysis are incorrect and that the proceeds are taxable to the insured. They base their conclusion on the assertion that an insurer’s payment or reimbursement is not excludable unless the expense involved would have been deductible if paid by the insured and not reimbursed. I contend that their conclusion is based on a premise that is inconsistent with and contradicted by the long-standing application of the tax law.

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June 28, 2019 in Scholarship, Tax | Permalink | Comments (0)

Student Tax Notes

June 28, 2019 in Scholarship, Tax | Permalink | Comments (0)

Thursday, June 27, 2019

Winchester: A Tax Theory of the Firm

Richard Winchester (Thomas Jefferson), A Tax Theory of the Firm, 88 U. Cin. L. Rev. (2019):

The U.S. has always had two distinctly different methods for taxing business profits. The method that applies in any given case has always depended on the tax classification assigned to the firm. However, there has never been a satisfactory way to determine a firm’s tax classification because the rules for doing so were never grounded in a theory of the firm that had any relevance for tax purposes.

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June 27, 2019 in Scholarship, Tax | Permalink | Comments (0)