Paul L. Caron
Dean




Wednesday, August 10, 2022

The Tax Lawyer Publishes New Issue

The Tax Lawyer has published Vol. 75, No. 4 (Summer 2022):

August 10, 2022 in ABA Tax Section, Scholarship, Tax, Tax Scholarship | Permalink

A Supreme Dilemma: Admissions v. Representation In Law School And Legal Profession

Ahmuan Williams (J.D. 2023, Oklahoma), A Supreme Dilemma: Admissions v. Representation in Law School and Legal Profession:

Diversity in the legal profession does not have to be a myth, but we have to put in the effort to do it. A Supreme Dilemma: Admissions v. Representation in Law School and Legal Profession gives you an idea of the challenges and history of being a minority in the legal profession created exclusively for white men. This paper examines affirmative action and its need to diversify the legal profession. It starts by examining the controversies in diversity and the legal profession. Then it acknowledges the positive impacts of diversity initiatives in the legal profession. It concludes by recommending that we adopt long-term diversity initiatives through our state constitutions, amendments, and education.

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August 10, 2022 in Legal Ed Scholarship, Legal Education, Scholarship | Permalink

Tax Prof Rankings By H-Index Since 2017 (Google Scholar)

Google Scholar (2015)Brian Leiter recently ranked the Top 75 law professors by citations as measured by Google Scholar H-Index All. Only two tax professors ranked in the Top 75:  Alan Auerbach (#8; UC-Berkeley) and James Hines (#24; Michigan). As Brian notes, many law professors do not have Google Scholar pages and citation counts vary by field. For more on the use of Google Scholar to measure law professor scholarly influence, see Gary Lucas (Texas A&M), Measuring Scholarly Impact: A Guide for Law School Administrators and Legal Scholars, 165 U. Pa. L. Rev. Online 165 (2017).

Yesterday I posted Google Scholar H-Index All rankings of the Top 104 tax professors with Google Scholar pages (data collected on August 5). Here are the Google Scholar H-Index Since 2017 rankings of the Top 100 tax professors with Google Scholar pages. If you are a full-time law school tax professor with a Google Scholar page and we missed including you, please contact me.

Rank Name School

Google Scholar H-index (Since 2017)

1 Alan Auerbach UC-Berkeley 43
2 James Hines Michigan 36
3 Reuven Avi-Yonah Michigan 25
3 Dhammika Dharmapala Chicago 25
5 David Weisbach Chicago 20
5 Kimberly Clausing UCLA 20
7 Jacob Goldin Chicago 19
7 Edward McCaffery USC 19
9 Dan Shaviro NYU 18
9 Robert Sitkoff Harvard 18
11 Brian Galle Georgetown 17
11 Kristin Hickman Minnesota 17
13 Daniel Hemel NYU 16
13 Eric Zolt UCLA 16
15 Leandra Lederman Indiana (Maurer) 15
15 Kyle Logue Michigan 15
17 Yariv Brauner Florida 14
17 Chris Sanchirico Penn 14
19 Bridget Crawford Pace 13
19 Nancy Knauer Temple 13
19 Diane Ring Boston College 13
22 David Gamage Indiana (Maurer) 12
22 Zachary Liscow Yale 12
22 Ruth Mason Virginia 12
22 Michael Simkovic USC 12
26 Hugh Ault Boston College 11
26 Clifton Fleming BYU 11
26 Rebecca Kysar Fordham 11
26 Sarah Lawsky Northwestern 11
26 Ajay Mehrotra Northwestern 11
26 Shu-Yi Oei Boston College 11
26 Darien Shanske UC-Davis 11
33 Joshua Blank UC-Irvine 10
33 Victor Fleischer UC-Irvine 10
33 Anthony Infanti Pittsburgh 10
33 Omri Marian UC-Irvine 10
33 Lloyd Hitoshi Mayer Notre Dame 10
33 Nancy McLaughlin Utah 10
33 Susan Morse Texas 10
33 James Repetti Boston College 10
33 Kyle Rozema Washington Univ. 10
33 Stephen Shay Boston College 10
33 Steven Bank UCLA 10
44 Ellen Aprill Loyola-L.A. 9
44 Leslie Book Villanova 9
44 John Brooks Fordham 9
44 John Coverdale Seton Hall 9
44 Kathleen Delaney Thomas North Carolina 9
44 Andrew Hayashi Virginia 9
44 Linda Jellum Idaho 9
44 Leigh Osofsky North Carolina 9
44 Jay Soled Rutgers 9
44 Linda Sugin Fordham 9
44 David Walker Boston Univ. 9
55 Samuel Brunson Loyola-Chicago 8
55 Paul Caron Pepperdine 8
55 Heather Field UC-Hastings 8
55 Francine Lipman UNLV 8
55 Henry Ordower St. Louis 8
55 Gregg Polsky Georgia 8

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August 10, 2022 in Legal Education, Scholarship, Tax, Tax Prof Rankings, Tax Scholarship | Permalink

Avi-Yonah & Gamage: Billionaire Mark-To-Market Reforms

Reuven Avi-Yonah (Michigan; Google Scholar) & David Gamage (Indiana; Google Scholar), Billionaire Mark-to-Market Reforms: Response to Susswein and Brown, 176 Tax Notes Fed. 555 (July 25, 2022):

Tax Notes Federal (2022)In their essay, Is It Time to Tax Disney’s Unrealized Capital Gains From 1965?, [176 Tax Notes Fed. 1717 (June 13, 2022),] Donald B. Susswein and Kyle Brown argue that a mark-to-market reform like the recent proposals for billionaire income tax reforms would amount to double taxation. We explain here why their arguments are incorrect. Instead, the primary impact of enacting a billionaire income tax reform would be to close the loopholes and combat the harmful political-optionality dynamics that enable many billionaire and megamillionaire taxpayers to fully and permanently escape income taxation on the majority of their true investment gains.

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August 10, 2022 in Scholarship, Tax, Tax Analysts, Tax Scholarship | Permalink

Tuesday, August 9, 2022

Tax Prof Rankings By H-Index All (Google Scholar)

Google Scholar (2015)Brian Leiter recently ranked the Top 75 law professors by citations as measured by Google Scholar H-Index All. Only two tax professors ranked in the Top 75:  Alan Auerbach (#8; UC-Berkeley) and James Hines (#24; Michigan). As Brian notes, many law professors do not have Google Scholar pages and citation counts vary by field. For more on the use of Google Scholar to measure law professor scholarly influence, see Gary Lucas (Texas A&M), Measuring Scholarly Impact: A Guide for Law School Administrators and Legal Scholars, 165 U. Pa. L. Rev. Online 165 (2017).

Here are the Google Scholar H-Index All rankings of the Top 104 U.S. tax professors with Google Scholar pages (data collected on August 5). If you are a full-time law school tax professor with a Google Scholar page and we missed including you, please contact me

Rank Name School Google Scholar H-index (All)
1 Alan Auerbach UC-Berkeley 91
2 James Hines Michigan 63
3 David Weisbach Chicago 35
4 Reuven Avi-Yonah Michigan 34
4 Dan Shaviro NYU 34
6 Dhammika Dharmapala Chicago 31
7 Edward McCaffery USC 30
8 Kimberly Clausing UCLA 26
8 Brian Galle Georgetown 26
8 Kyle Logue Michigan 26
8 Chris Sanchirico Penn 26
8 Eric Zolt UCLA 26
13 Robert Sitkoff Harvard 24
14 Nancy Knauer Temple 23
15 Kristin Hickman Minnesota 22
15 Steven Bank UCLA 22
17 Leandra Lederman Indiana (Maurer) 21
18 Jacob Goldin Chicago 20
19 Daniel Hemel NYU 19
19 Richard Kaplan Illinois 19
19 Diane Ring Boston College 19
22 Ellen Aprill Loyola-L.A. 17
22 Yariv Brauner Florida 17
22 Ruth Mason Virginia 17
22 Nancy McLaughlin Utah 17
22 Jay Soled Rutgers 17
27 Hugh Ault Boston College 16
27 Paul Caron Pepperdine 16
27 John Coverdale Seton Hall 16
27 Bridget Crawford Pace 16
27 Victor Fleischer UC-Irvine 16
27 Clifton Fleming BYU 16
33 Anthony Infanti Pittsburgh 15
33 Lloyd Hitoshi Mayer Notre Dame 15
33 Ajay Mehrotra Northwestern 15
33 Gregg Polsky Georgia 15
33 Richard Pomp Connecticut 15
33 Linda Sugin Fordham 15
39 David Gamage Indiana (Maurer) 14
39 Shu-Yi Oei Boston College 14
39 James Repetti Boston College 14
39 Darien Shanske UC-Davis 14
39 Stephen Shay Boston College 14
39 David Walker Boston Univ. 14
45 Bradley Borden Brooklyn 13
45 Sarah Lawsky Northwestern 13
45 Michael Simkovic USC 13
48 Samuel Brunson Loyola-Chicago 12
48 Terrence Chorvat George Mason 12
48 Linda Jellum Idaho 12
48 Rebecca Kysar Fordham 12
48 Francine Lipman UNLV 12
48 Zachary Liscow Yale 12
48 Omri Marian UC-Irvine 12
48 Theodore Seto Loyola-L.A. 12
48 Peter Wiedenbeck Washington Univ. 12
57 Joshua Blank UC-Irvine 11
57 Neil Buchanan Florida 11
57 Stephanie Hoffer Ohio State 11
57 John Miller Idaho 11
57 Susan Morse Texas 11
57 Henry Ordower St. Louis 11

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August 9, 2022 in Legal Education, Scholarship, Tax, Tax Prof Rankings, Tax Scholarship | Permalink

Socialism, Progressive Taxation, And The Fiscal State

Sol Picciotto (Lancaster, London; Google Scholar), Socialism, Progressive Taxation, and the Fiscal State:

This paper traces the philosophical, political, sociological and economic underpinning for the advocacy by socialists of progressive taxation, from the Communist Manifesto to recent supporters of tax justice campaigns. Socialists’ attitudes to taxation have been tied to their primary aim of socialisation of the ownership of the means of production, reflecting the view that inequality and exploitation are inherent in capitalism, which rests on private property enforced by state power. Communism, as developed particularly by Marx and Engels, aimed to transcend capitalism and end the separation of the state from civil society, by the socialisation of property, including through progressive taxation. Marx’s view in Capital volume 3 that the emergence of large scale enterprises already entailed the ‘abolition of capital as private property within the framework of capitalist production itself’, when it was published in 1894 became central to the debates among German socialists (Liebknecht, Kautsky, Bernstein and Luxemburg), and the Austro-Marxists (Renner, Hilferding), but socialists split when graduated direct taxes were introduced to help fund the welfare-warfare state. Goldscheid’s outline for a social science of the state centred on fiscality underpinned his radical and influential wartime proposals to finance the socialisation of large corporations through taxes on capital.

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August 9, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

The Effect Of Tax Reform And COVID-19 On Tax Flight Among U.S. Millionaires

Cristobal Young (Cornell; Google Scholar) & Ithai Lurie (U.S. Treasury Department; Google Scholar), Taxing the Rich: The Effect of Tax Reform and the COVID-19 Pandemic on Tax Flight Among U.S. Millionaires:

Taxing the rich is one of the central policy debates in this time of rising inequality. Elite taxation can change the distribution of income in society, support equitable growth, and finance public goods and services that improve the quality of life for everyone. None of these goals are well served, however, if taxes lead to high levels of tax flight among U.S. millionaires. Progressive taxation, especially at the state level, ultimately depends on the embeddedness of the tax base. In other words, are the rich “mobile millionaires,” readily drawn to places with lower tax rates? Or are they “embedded elites,” who are reluctant to migrate away from places where they have been highly successful?

Supply-side economics has long argued that taxes on the rich cause avoidance behavior and reduce the incentive to work, invest, and innovate. Amid the growing red state/blue state rivalry in the United States, tax incentives for migration have become a new focus of debate. Why would rich people continue to live in New York, New Jersey, or California when they could save large sums in taxes by moving to places such as Florida, Texas, or Nevada? Of course, taxes also fund public goods that the rich consume—not even the richest city dweller can get to work without public infrastructure—but top earners have greater ability to opt out of many public services such as schools and social services. From this view, the rich seem motivated and mobile—sensitive to taxation and readily capable of exit.

Yet there are myriad social dimensions that rich households face when migrating to avoid taxes. Top earners are often the “working rich,” with many roots in the places where they built their careers. Others are business owners with complex ties between customers, suppliers, and workers that are not easily relocated. Top earners are often married, have school-aged children, and have lived in their state for many years—social factors that tie people to places. These ties represent place-specific social capital, a form of embeddedness that makes migration costly.

Our new working paper, Taxing the Rich: How Incentives and Embeddedness Shape Millionaire Tax Flight, examines the joint effect of incentives and embeddedness on the mobility of the rich in the United States. Drawing on administrative tax data from IRS tax returns of top income earners, we study two large-scale “natural experiments,” which are contrasting real-life situations that social scientists investigate to determine cause-and-effect relationships. The first is the federal Tax Cuts and Jobs Act of 2017, which changed tax incentives to favor low-tax states. The second is the COVID-19 pandemic, which began in early 2020 in the United States and which deeply disrupted people’s socioeconomic attachments to places. ...

In a typical year, a small number of millionaires circulate between states: Roughly 2.7 percent of the millionaire population moves across state lines, exchanging one state for another. How much did the 2017 tax reform influence this migration? In our working paper, we examined migration rates for every income group, starting from those with the lowest incomes to those making $5 million a year or more. We also examined migration rates for those living in low-tax states, who were incentivized to stay, and high-tax states, who were incentivized to move. Migration patterns before and after the tax reform law passed were essentially identical. (See Figure 1.)

Figure 1

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August 9, 2022 in Scholarship, Tax, Tax Scholarship, Think Tank Reports | Permalink

Monday, August 8, 2022

Haneman & Weber: The Abandonment Of International College Athletes By NIL Policy

Victoria J. Haneman (Creighton; Google Scholar) & David P. Weber (Creighton; Google Scholar), The Abandonment of International College Athletes by NIL Policy:

A new era in college sports dawned on July 1, 2021. College sports generate billions of dollars in revenue, and the National Collegiate Athletic Association announced that college athletes were (subject to various limitations and restrictions) entitled to earn money based upon name, image, and likeness (NIL) without losing eligibility to compete. It is estimated that more than $917 million in NIL deals have been generated in the first twelve months alone. The more than 450,000 college athletes across the United States are now able to leverage NIL to make paid appearances, endorse products or services on social media, receive compensation for autograph signings, and promote local and national businesses. Excluded from most NIL opportunities, however, are the 12% of athletes recruited from outside of the United States. Most international athletes enter the United States on student (F) visas, which are subject to very specific rules for when employment is permissible in the United States. The creators of the F visa had no reason in 1952 to include an NIL exception to the work prohibition, which consequently results in serious inequity for these athletes today. 

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August 8, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

The Tax Consequences Of Name, Image, And Likeness Rules For College Athletes

Camp (2021)Following the Supreme Court’s decision in National Collegiate Athletic Association v. Alston, 594 U.S. ___ (2021), the NCAA started allowing college athletes to accept payments for use of their name, image and likeness, effective July 1, 2021. That change in policy has created a host of various compliance issues, such as trademark licensing issues. It also has created tax issues for the student-athletes. Frank Messina (Alabama) and Marena M. Messina (Alabama) address the basics in their article “A Primer on the Income Tax Consequences of the NCAA’s Name, Image, and Likeness (NIL) Earnings for College Athletes, 4 Journal of Athletic Development and Experience 189 (2022).  From the article's abstract: "Athletes must learn to understand the tax rules associated with the income from the NIL.”  Click the "continue reading" button for the full abstract .

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August 8, 2022 in Bryan Camp, Miscellaneous, Scholarship, Tax, Tax Scholarship | Permalink

Lesson From The Tax Court: Non-Receipt of 1099 Does Not Get You Out of Penalties

Camp (2021)When we think of penalties we naturally think of punishment.  I mean, to channel Steven Wright, if a penalty is not punishment when why does the word start with “penal”?  Both this week and next week’s lesson teach us how penalties serve other purposes as well.  Today, in Lionel E. Larochelle and Molly B. Larochelle v. Commissioner, T.C. Summ. Op. 2022-12 (July 12) (Judge Leyden), we learn why non-receipt of a Form 1099 does not constitute reasonable cause to escape the §6662(a) penalty for making a substantial understatement of tax.  Next week we will look at whether a court-ordered disgorgement of illegal gains is a penalty for purposes of a §162(f) prohibition on  deductions for governmental fines or penalties.  Today’s short lesson awaits below the fold. 

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August 8, 2022 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (1)

Sunday, August 7, 2022

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. The #1 paper is #927 among 16,941 tax papers in all-time downloads:

  1. SSRN Logo (2018)[672 Downloads]  Tax Administration and Technology: From Enhanced to No-Cooperation?, by João Félix Pinto Nogueira (Catholic University Portugal & IBFD; Google Scholar)
  2. [331 Downloads]  Congress Takes Its War On Cash To Digital Assets: Understanding Tax Code Section 6050I, by Abraham Sutherland (Virginia; Google Scholar)
  3. [324 Downloads]  The Treatment of Tax Incentives under Pillar Two, by Belisa Ferreira Liotti (Google Scholar), Joy Waruguru Ndubai, Ruth Wamuyu, Ivan Lazarov (Google Scholar) & Jeffrey Owens (all of Vienna University of Economics and Business)
  4. [273 Downloads]  Preventing Unacceptable Tax Treaty Overrides, by Craig Elliffe (Auckland; Google Scholar)
  5. [245 Downloads]  Would the Securing a Strong Retirement Act Secure More Retirement Equity?, by Albert Feuer (Law Offices of Albert Feuer, New York; Google Scholar)

August 7, 2022 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink

Friday, August 5, 2022

Weekly SSRN Tax Article Review And Roundup: Saito Reviews Kysar’s Interpreting By The Rules

This week, Blaine Saito (Northeastern; Google Scholar) reviews a new work by Rebecca Kysar (Fordham; Google Scholar), Interpreting by the Rules, 99 Tex. L. Rev. 1115 (2021).

Saito-blaine-800x800-1

Famed Senate Parliamentarian Floyd Riddick said that “[t]he rules of the Senate are perfect. And if they changed every one of them, the rules will be perfect.”[1] The statement shows how rules define both the U.S. Senate and House of Representatives. Recently, scholars have turned their attention to the rules and process of the legislation as a form of pushback against strict textualist approaches to statutory interpretation. These process-based approaches are often invoked in interpreting tax and mandatory spending statutes. But as Rebecca Kysar shows in her piece, Interpreting by the Rules, such an approach requires context and caution. As Riddick’s quote notes, the rules are malleable, and furthermore, they are made to be broken.

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August 5, 2022 in Blaine Saito, Scholarship, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Thursday, August 4, 2022

Goldin & Kleiman: Whose Child Is This? Improving Child-Claiming Rules In Safety Net Programs

Jacob Goldin (Chicago; Google Scholar) & Ariel Jurow Kleiman (Loyola-L.A.; Google Scholar), Whose Child Is This? Improving Child-Claiming Rules in Safety-Net Programs, 131 Yale L. J. 1719 (2022):

Yale Law Journal (2022)To address the staggering problem of child poverty in the United States, policymakers distribute a host of safety-net and transfer programs designed to support children and families. All of these programs require rules to determine how benefits are distributed. Among the more important of these are “child-claiming” rules. These rules determine which adults can receive benefits for which children, driving how well a program helps recipients and satisfies societal goals.

This Article critically assesses the design of child-claiming rules for safety-net programs, using as case studies the Child Tax Credit and the Earned Income Tax Credit.

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August 4, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Wednesday, August 3, 2022

Knoll & Mason: Bibb Balancing

Michael S. Knoll (Penn) & Ruth Mason (Virginia; Google Scholar), Bibb Balancing, 91 Geo. Wash. L. Rev. __ (2023):

Gw-law-reviewCourts 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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August 3, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Gianni: Supervisory Approval Of Penalties—The Opening Of A Graev Pandora's Box

Monica Gianni (CSUN), Supervisory Approval of Penalties: The Opening of a Graev Pandora's Box, 75 Tax Law. __ (2022):

Tax-lawyerSection 6751(b) of the Internal Revenue Code requires supervisory approval in writing prior to assessment of certain penalties. Enacted in 1998 as part of the Internal Revenue Service (“IRS”) Restructuring and Reform Act, the statute’s purpose was to prevent IRS agents from using penalties as bargaining chips. The section remained essentially dormant for over 20 years, with both the IRS and taxpayers accepting the position that approval needed to be obtained only prior to assessment. The trilogy of Graev cases and a decision of the Second Circuit Court of Appeals in Chai v. Commissioner changed the § 6751(b) landscape completely, opening a Pandora’s box of taxpayers using § 6751(b) to avoid penalties on the technicality of no-written-supervisory approval. Hundreds of court cases have followed, resulting in cases inconsistently interpreting § 6751(b) and well-counseled taxpayers avoiding tax penalties.

This article examines the enactment of § 6751(b) and explores in detail the Graev and Chai decisions.

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August 3, 2022 in ABA Tax Section, Scholarship, Tax, Tax Scholarship | Permalink

Tuesday, August 2, 2022

Florida Tax Review Publishes New Issue

The Florida Tax Review has published Vol. 25, No. 1 (Fall 2021):

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August 2, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Listening To Our Students: Fostering Resilience And Engagement To Promote Culture Change In Legal Education

Ann Sinsheimer (Pittsburgh) & Omid Fotuhi (Pittsburgh), Listening to Our Students: Fostering Resilience and Engagement to Promote Culture Change in Legal Education, 26 Legal Writing: The J. Legal Writing Inst. 81 (2022):

In this Article, we describe a dynamic program of research at the University of Pittsburgh School of Law that uses mindset to promote resilience and engagement in law students. For the last three years, we have used tailored, well-timed, psychological interventions to help students bring adaptive mindsets to the challenges they face in law school. The act of listening to our students has been the first step in designing interventions to improve their experience, and it has become a kind of intervention in itself. Through this work, we have learned that simply asking our law students about their experiences and listening carefully to their answers helps create an environment that supports academic and professional growth.

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August 2, 2022 in Legal Ed Scholarship, Legal Education, Scholarship | Permalink

Monday, August 1, 2022

Amarante: States As Laboratories For Charitable Compliance—An Empirical Study

Eric Franklin Amarante (Tennessee; Google Scholar), States as Laboratories for Charitable Compliance: An Empirical Study, 90 Geo. Wash. L. Rev. 445 (2022):

Gw-law-reviewEach year, the Internal Revenue Service (“IRS”) awards 501(c)(3), tax exempt status to thousands of organizations that do not meet the statutory requirements for charities. This is because the IRS, facing increasingly severe budget cuts, adopted a woefully inadequate application process that fails to identify even the most obvious of unworthy applicants. To illustrate this problem, this Article reviews the formation documents of 500 charities that received 501(c)(3) status in 2018 using this new application process. The results of this study are dramatic as they are upsetting: In Florida, only 41.11% of the charities in the study met the statutory requirements necessary for 501(c)(3) status. In Ohio, that number is 33.33%, meaning that two-thirds of the organizations using the new application process were incorrectly awarded 501(c)(3) status. The worst performing state in the study, Idaho, boasted only 22.08% of organizations meeting the statutory test.

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August 1, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Virtual Roundtable Tomorrow On Starving The Beast: Ronald Reagan And The Tax Cut Revolution

Starving the Beast 2On behalf of the Ronald Reagan Institute, the Washington, D.C. Office of the Ronald Reagan Presidential Foundation and Library, we invite you to attend the next iteration of the Reagan Scholars Virtual Roundtable Series from 1:00 pm to 3:00 pm Eastern Time on Tuesday, August 2, 2022. Ronald Reagan Institute will host a virtual roundtable on August 2 from 1:00 p.m. - 2:00 p.m. ET. If you would like to attend, please contact Anthony Eames

For this session, we welcome Professor Monica Prasad of Northwestern University. She is the author of Starving the Beast: Ronald Reagan and the Tax Cut Revolution - winner of the best book award in economic sociology. Dr. Brian Domitrovic, Richard S. Strong Scholar at the Laffer Center for Supply-Side Economics, will offer his own comments in response. He is a leading authority on the history of on supply-side economics. See his recent book The Emergence of Arthur Laffer: The Foundations of Supply-Side Economics in Chicago and Washington, 1966-1976 

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August 1, 2022 in Conferences, Scholarship, Tax, Tax Scholarship | Permalink

Lesson From The Tax Court: Excise Tax On Messed Up IRA Rollover Different From Income Tax

Camp (2021)The tax laws are conflicted.  They encourage retirement savings by permitting taxpayers to deduct contributions to their Individual Retirement Accounts (IRA’s).  But that encouragement is hedged by various restrictions and caps as well as a special excise tax imposed on contributions that exceed the applicable caps.  And Congress crosses its fingers if taxpayers take early distributions.  Those can result in penalties as well as inclusion in gross income.  However, Congress uncrosses those fingers if the early distributions are properly rolled into another IRA.

Given these various statutory hedges and crossed-fingers, it’s no wonder that navigating the tax rules for retirement accounts is tricky!  Particularly tricky are managing rollovers from one type of retirement plan to another.  Mistakes there can have both income tax consequences and excise tax consequences.  Thus, we must always keep straight the difference between different types of taxes, just like we saw in last week’s lesson.

This week, we learn how excise tax consequences are different than income tax consequences of a messed up IRA rollover.  In Clair R. Couturier, Jr. v. Commissioner, T.C. Memo. 2022-69 (July 6, 2022) (Judge Lauber), the taxpayer escaped a huge income tax liability for messing up some of the rollover rules because the limitation period for assessment had run, but got snagged for a $8.5 million excise tax for excess IRA contributions.  Yeah, we’re talking a lot of money here, putting enough at risk for the taxpayer to hire one of the best tax lawyers in the country to represent him.  Alas, even Lavar Taylor could not pull him out of the $8.5 million hole.  He tried to argue that the IRS was bound by the income tax characterization of the transaction.  The Court rejected that argument because...an excise tax is not an income tax.  Details below the fold. 

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August 1, 2022 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (0)

Sunday, July 31, 2022

The Top Five New Tax Papers

This week's list of the Top 5 Recent Tax Paper Downloads is the same as last week's list. The #1 paper is #1,019 among 16,932 tax papers in all-time downloads:

  1. SSRN Logo (2018)[636 Downloads]  Tax Administration and Technology: From Enhanced to No-Cooperation?, by João Félix Pinto Nogueira (Catholic University Portugal & IBFD; Google Scholar)
  2. [463 Downloads]  Tax Neutrality Regimes and GloBE, by Leopoldo Parada (Leeds; Google Scholar)
  3. [327 Downloads]  Congress Takes Its War On Cash To Digital Assets: Understanding Tax Code Section 6050I, by Abraham Sutherland (Virginia; Google Scholar)
  4. [312 Downloads]  The Treatment of Tax Incentives under Pillar Two, by Belisa Ferreira Liotti (Google Scholar), Joy Waruguru Ndubai, Ruth Wamuyu, Ivan Lazarov (Google Scholar) & Jeffrey Owens (all of Vienna University of Economics and Business)
  5. [268 Downloads]  Preventing Unacceptable Tax Treaty Overrides, by Craig Elliffe (Auckland; Google Scholar)

July 31, 2022 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink

Saturday, July 30, 2022

Listen!: Amplifying The Experiences Of Black Law School Graduates In 2020

Sarah J. Schendel (Suffolk; Google Scholar), Listen!: Amplifying the Experiences of Black Law School Graduates in 2020, 100 Neb. L. Rev. 73 (2021):

Law students graduating in 2020 faced a number of unusual challenges. However, perhaps no students faced more emotional, psychological, logistical, and financial challenges than Black law school graduates in 2020. In addition to changes in the administration of the bar exam (including the use of technology that struggled to recognize Black faces) and delays in the administration of the exam that led to anxiety and increased financial instability, Black communities were concurrently being disproportionately impacted by the COVID-19 pandemic. The pandemic led to increased care-taking responsibilities for many, concerns over the health of family members, and a lack of quiet and reliable space to study. Black law school graduates already struggling to juggle these challenges were also confronted with a rise in anti-Black police brutality, and the racist words and actions of politicians. As a result of this unprecedented series of stressors, many Black law gradates struggled to focus on studying for the bar, with some choosing to delay or abandon sitting for the bar altogether. Many expressed anger, disappointment, and betrayal at the profession they have worked so hard to enter. This Article summarizes the survey responses of over 120 Black law students who graduated in 2020 and were asked how the COVID pandemic and increased anti-Black violence impacted their health, education, and career aspirations. It seems likely that the impact of 2020 on the presence and wellbeing of Black lawyers in the legal profession will be felt for years to come. As professors, deans, lawyers, and policymakers reexamine the function of the bar exam and confront inequalities in legal education, we need to listen to these graduates’ experiences.

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July 30, 2022 in Legal Ed Scholarship, Legal Education, Scholarship | Permalink

Friday, July 29, 2022

Weekly SSRN Tax Article Review And Roundup: Speck Reviews Klein’s The Corporate Tax Paradox

This week, Sloan Speck (Colorado; Google Scholar) reviews a new work by Israel Klein (Ariel University; Google Scholar), The Corporate Tax Paradox, 42 Va. Tax Rev. __ (2022).

Sloan-speck

In The Corporate Tax Paradox, Israel Klein presents (and offers a resolution to) a puzzle: After the IRS began requiring certain corporate taxpayers to report uncertain tax positions in 2010, the net dollar value of these positions increased annually for large public companies, growing from $162 billion in 2013 to $241 billion in 2020. If the IRS has quantitative and qualitative information on these uncertain tax positions, why doesn’t it audit each and every one of them to conclusion? Alternatively, why do large public companies continue to report these uncertain (and, in Klein’s terminology, unsustainable) positions, if they’re required to be disclosed to both shareholders and the IRS?

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July 29, 2022 in Scholarship, Sloan Speck, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Brunson: Decentralized Autonomous Organizations And Futureproofed Tax Status

Samuel D. Brunson (Loyola-Chicago; Google Scholar), Decentralized Autonomous Organizations and Futureproofed Tax Status:

In the last half decade, digital autonomous organizations have exploded. Where there was no such thing prior to 2016, there are now at least 4,000. There is some debate over what type of legal entity, if any, a DAO is. But, thanks to the check-the-box election, developed in response to LLCs, there is no question about the entity status of DAOs. They default as partnerships.

Figuring out the default tax status of DAOs does not end the entity issue, though. Partnership taxation comes with certain obligations, obligations that at times run counter to the ethos of crypto investment. For instance, the anonymity that crypto promises is incompatible with partnerships' tax obligation to collect information about their partners.

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July 29, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Thursday, July 28, 2022

Kysar: Interpreting By The Rules

Rebecca M. Kysar (Fordham; Google Scholar), Interpreting by the Rules, 99 Tex. L. Rev. 1115 (2021):

Texas Law ReviewA promising new school of statutory interpretation has emerged that tries to wed the work of Congress with that of the courts by tying interpretation to congressional process. The primary challenge to this process-based interpretive approach is the difficulty in reconstructing the legislative process. Scholars have proposed leveraging Congress’s procedural frameworks and rules as reliable heuristics to that end. This Article starts from that premise but will add wrinkles to it. The complications stem from the fact that each rule is adopted for distinct reasons and is applied differently across contexts. As investigation into these particularities proceeds, it becomes apparent that the complications are also rooted in something deeper—that Congress’s procedures are often hollow, even fraudulent. Congress, it turns out, breaks its own rules with impunity.

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July 28, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Ancillary Skills And Law School Success

Michael D. O. Rusco (Southern), Ancillary Skills and Law School Success, 35 The Second Draft 1 (2022):

This article assumes that some of what influences a student’s ultimate law school performance are “ancillary skills.” Ancillary skills are skills that affect performance or address stressors that law students commonly face but are not primarily academic or intellectual in nature. In fact, most of them are physiological, psychological, and organizational. Despite the impact these skills can have on performance, most law students are never advised on the effect they can have or instructed how to use them.

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July 28, 2022 in Legal Ed Scholarship, Legal Education, Scholarship | Permalink

Academic Law Libraries And Scholarship: Communication, Publishing, And Ranking

Dana Neacsu (Columbia; Google Scholar) & James M. Donovan (Kentucky; Google Scholar), Academic Law Libraries and Scholarship: Communication, Publishing, and Ranking, 49 J.L. & Educ. 433 (2020):

We argue that the increasing role of scholarly impact in determining a school’s status will provide a new opportunity for libraries to assume a critical institutional role behind its traditional support of scholarship and teaching. In practice, this increased role can evolve in a multitude of ways. Based on the data used here, a strong argument can be made in favor of each library taking charge of both their faculty scholarly impact and publication of its school’s journals. Based on the success story of Perma.cc, a good argument can be made in favor of creating a consortium supporting both these endeavors. Either way, our thesis is that libraries cannot confine themselves to the roles they played in the predigital era. Law faculties create scholarship, and law students decide how much of that scholarship is published in student-edited journals.

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July 28, 2022 in Legal Ed Scholarship, Legal Education, Scholarship | Permalink

Wednesday, July 27, 2022

Cui: Strategic Incentives For Pillar Two Adoption

Wei Cui (British Columbia; Google Scholar), Strategic Incentives for Pillar Two Adoption:

I analyze countries’ strategic incentives for adopting elements of the OECD’s Pillar Two proposal for reforming international taxation. I treat the three components of Pillar Two—the Income Inclusion Rule (IIR), the Under-Taxed Profits Rule (UTPR), and the Qualified Domestic Minimum Top-Up Tax (QDMT)—as independent of one another. Countries are assumed to make strategic decisions about whether to adopt each component simultaneously with other countries facing similar choices, each aiming to maximize its own objectives.

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July 27, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Krauss: Pincites

Sam Fox Krauss (J.D. 2022, NYU; Google Scholar), Note, Pincites, 97 N.Y.U. L. Rev. __ (2022):

Within the literature on legal scholarship, academics have studied citation practices. For example, scholars have examined which authors, journals, and articles are most-cited. But no one has examined which parts of articles scholars cite. Understanding which parts of articles scholars cite is not only intrinsically interesting, but also could inform how authors structure articles. This Note presents the results of a unique, hand-coded dataset of thousands of pinpoint citations. In brief: authors are more likely to cite the beginning of articles but split their remaining citations roughly evenly among the remainder. This pattern holds across flagship journals of variously-ranked law schools and articles of varying lengths, but is less-pronounced for self-citation. While a cynical explanation of the data is possible, a better explanation serves as a modest rebuttal to certain criticisms of legal scholarship.

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July 27, 2022 in Legal Ed Scholarship, Legal Education, Scholarship | Permalink

No New Tax Cuts? Examining The Rescue Plan's New State Tax Limits

Conor Clarke (DOJ; Google Scholar) & Edward G. Fox (Michigan; Google Scholar), No New Tax Cuts? Examining the Rescue Plan's New State Tax Limits, 103 Tax Notes St. 1361 (Mar. 28, 2022):

Tax-notes-stateIn this article, Clarke and Fox examine the American Rescue Plan Act’s restrictions on state tax cuts, arguing that the restrictions are a variation on more familiar maintenance-of-effort provisions. These provisions are common, and are designed to help ensure that federal grants supplement rather than supplant state spending by requiring the state to maintain its level of spending on a program. Clarke and Fox conclude that the Rescue Plan’s requirements create similar incentives, and argue that the similarity makes it more likely that the act’s tax provisions are consonant with the Constitution’s spending clause.

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July 27, 2022 in Scholarship, Tax, Tax Analysts, Tax Scholarship | Permalink

Scharff: The Home Rule For The 21st Century Project's State Support For Local Democracy Provisions

Erin Adele Scharff (Arizona State), Local Budgets, Local Decisions: The Home Rule for the 21st Century Project's State Support for Local Democracy Provisions, 100 N.C. L. Rev. 1505 (2022):

North Carolina Law ReviewAs scholars of local government have long noted, without adequate local revenue, home rule provides hollow legal authority. Recognizing the importance of local revenue, the National League of Cities’ Principles of Home Rule for the 21st Century (“Principles”) explicitly includes taxation as a power granted by home rule and articulates a constitutional commitment to adequate intergovernmental aid. To further strengthen local budgetary control, the model bans unfunded mandates and incorporates an anti-coercion principle that requires conditions on state aid relate to the purposes of such aid. 

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July 27, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Fall 2022 Online Law Review Article Submission Guide

Following up on last week's post, Fall 2022 Law Review Article Submission Guide:  Bridget J. Crawford (Pace; Google Scholar), Information for Submitting to Online Law Review Companions:

Law Review SubmissionsThis document contains information about submitting essays, commentaries, reviews, responses, and other writings to online companions to the main law reviews and journals at selected law schools. The document includes word-count limitations, subject matter specifications, preferred submission methods, whether articles from the online journal are included in HeinOnline’s Law Journal Library and other information of possible interest to authors. It covers 20 online companions to main law reviews.

Bridget J. Crawford, Submission Guide for Law Review Online Companions:

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July 27, 2022 in Legal Ed Scholarship, Legal Education, Scholarship | Permalink

Tuesday, July 26, 2022

Jeremy Bearer-Friend Wins Article Award For 'Colorblind Tax Enforcement'

Bearer-Friend (2021)Jeremy Bearer-Friend (George Washington; Google Scholar) received the Senior Paper Award for his article, Colorblind Tax Enforcement, 97 N.Y.U. L. Rev. 1 (2022), at the ComplianceNet Conference (program) held at the University of Amsterdam Law School earlier this month:

The United States Internal Revenue Service (IRS) has repeatedly taken the position that because the IRS does not ask taxpayers to identify their race or ethnicity on submitted tax returns, IRS enforcement actions are not affected by taxpayers’ race or ethnicity. This claim, which I call “colorblind tax enforcement,” has been made by multiple IRS Commissioners serving in multiple administrations (both Democratic and Republican). This claim has been made to members of Congress and to members of the press.

In this Article, I refute the IRS position that racial bias cannot occur under current IRS practices.

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July 26, 2022 in Legal Education, Scholarship, Tax, Tax Scholarship | Permalink

Monday, July 25, 2022

Lesson From The Tax Court: No §6015 Equitable Relief For §6672 Penalties

Camp (2021)The Internal Revenue Code is full of taxes and penalties.  Oh my, so many taxes and penalties!  You must always stay aware of which kinds of taxes or penalties are at issue in order to know what rules of law apply.  This week and next week will give us two lessons on the importance in keeping straight the different kinds of taxes and penalties.

In Angela M. Chavis, 158 T.C. No. 8 (June 15, 2022) (Judge Lauber), the taxpayer was seeking spousal relief under §6015(f) from Trust Fund Recovery Penalties assessed per §6672 against her and her then-husband.  The liability for §6672 penalties is joint and several.  And, if you squint, the text of §6015(f) appears to allow relief from any joint and several liability.  Today we learn not to squint. Section 6015(f) provides relief only from joint liability for income taxes.  Trust Fund Recovery Penalties are not income taxes.  So no spousal relief for §6672 penalties.  You will find a bit more (but not much) below the fold.  It’s a short lesson for a hot summer day.

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July 25, 2022 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (2)

Sunday, July 24, 2022

Confessions Of A Catholic Litigator

David A. Shaneyfelt (Alvarez Firm, Calabasas, CA), Confessions of a Catholic Litigator, 17 U. St. Thomas L.J. 111 (2020):

I imagine there are Navy Seals whose consciences prick them when they swim aboard an enemy’s base in the dead of night, slit the throats of guards on duty, retrieve a hostage, gun down pursuers, and swim back to their escape boat. They do what is necessary under the circumstances, within a framework that renders their actions morally unobjectionable. I am
not a Navy Seal. I am a civil litigator. And I am a Catholic, just as I know there are Catholic Navy Seals. I feel like the same lessons that apply to them apply to me, because I, too, seem to be doing the moral equivalent of slitting throats and gunning down enemies, while operating in a framework—the legal profession—that renders my actions morally unobjectionable.

For more than thirty years, I have struggled over my role within the framework of litigation. I want to be a good Catholic. I want to be a good lawyer. Can I be both? Are there things I must do in my practice that offend my faith (and thus offend God)? Conversely, will practicing my faith to the fullest make me an inferior lawyer? Am I binding myself to some higher standard than legal ethics require?

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July 24, 2022 in Faith, Legal Ed Scholarship, Legal Education, Scholarship | Permalink

The Top Five New Tax Papers

This week's list of the Top 5 Recent Tax Paper Downloads is the same as last week's list. The #1 paper is #1,035 among 16,925 tax papers in all-time downloads:

  1. SSRN Logo (2018)[627 Downloads]  Tax Administration and Technology: From Enhanced to No-Cooperation?, by João Félix Pinto Nogueira (Catholic University Portugal & IBFD; Google Scholar)
  2. [461 Downloads]  Tax Neutrality Regimes and GloBE, by Leopoldo Parada (Leeds; Google Scholar)
  3. [314 Downloads]  Congress Takes Its War On Cash To Digital Assets: Understanding Tax Code Section 6050I, by Abraham Sutherland (Virginia; Google Scholar)
  4. [302 Downloads]  The Treatment of Tax Incentives under Pillar Two, by Belisa Ferreira Liotti (Google Scholar), Joy Waruguru Ndubai, Ruth Wamuyu, Ivan Lazarov (Google Scholar) & Jeffrey Owens (all of Vienna University of Economics and Business)
  5. [258 Downloads]  Preventing Unacceptable Tax Treaty Overrides, by Craig Elliffe (Auckland; Google Scholar)

July 24, 2022 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink

Saturday, July 23, 2022

U.S. Inequality Is Much Less When You Measure Spending Power (Including Government Transfer Payments) As Well As Income And Wealth

New York Times Op-Ed:  There’s a Better Way to Measure Economic Inequality, by Peter Coy:

Differences in wealth and differences in income are the wrong ways to measure economic inequality, and going by either of them “dramatically overstates” the degree of inequality in the United States, a working paper argues.

The right measure of economic inequality is differences in spending power, says the paper U.S. Inequality and Fiscal Progressivity: An Intragenerational Accounting, which is by the economist Alan Auerbach of the University of California, Berkeley, the economist Laurence Kotlikoff of Boston University and the software developer Darryl Koehler of Economic Security Planning.

Spending power — the amount of goods and services that a person can buy — is what really matters to people because it captures the ability to satisfy their wants and needs, Auerbach, an expert on the economics of public finance, told me. He asked me to imagine bars of gold encased in a radioactive block. If wealth can’t be used, it’s of no value. The same goes for income, he said.

Study after study has shown rising inequality of income and wealth in the United States. An article by the economists Thomas Piketty, Emmanuel Saez and Gabriel Zucman published in 2017 found that the average real income of the top 0.1 percent of the population grew by 298 percent between 1984 and 2014, while the average real income of the bottom half of the population grew just 21 percent.

But spending power gives a different picture. Still bad, but not as bad. The richest 1 percent of 40- to 49-year-olds in the United States own 29.1 percent of their age cohort’s net wealth, but account for only 11.8 percent of their group’s remaining lifetime spending power, the new paper says. The poorest fifth of the 40-somethings own just 0.4 percent of the group’s net wealth but have 6.6 percent of the remaining lifetime spending power, the paper says.

Auerbach

Difference in wealth overstates inequality because it fails to capture two of the main enablers of spending power, namely earnings from work and government benefits, the paper says. Someone who has no money in the bank can still have a relatively decent lifestyle based on salary and various transfer payments, including Social Security.

Alan J. Auerbach (UC-Berkeley; Google Scholar), Laurence J. Kotlikoff (Boston University; Google Scholar) & Darryl Koehler (Economic Security Planning), U.S. Inequality and Fiscal Progressivity: An Intragenerational Accounting:

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July 23, 2022 in Legal Education, Scholarship, Tax, Tax News, Tax Scholarship | Permalink

Friday, July 22, 2022

Weekly SSRN Tax Article Review And Roundup: Kim Reviews Grimmelmann's Programming Languages And Law

This week, Young Ran (Christine) Kim (Cardozo; Google Scholar) reviews a new work by James Grimmelmann (Cornell; Google Scholar), Programming Languages and Law (2nd ACM Symposium on Computer Science and Law, forthcoming 2022).

Kim

Programming language and law are conceptually and methodologically similar. They both use words. Computer science and law are both linguistic professions whose practitioners use language to create, manipulate, and interpret complex abstractions. Such similarity creates a unique opportunity for programming-language theory (PL theory) to contribute to law. But how and to what extent? A lawyer with no programming background might find it difficult to answer. I would like to introduce a recent paper, Programming Languages and Law (2nd ACM Symposium on Computer Science and Law, forthcoming 2022), by James Grimmelmann. Grimmelmann is a professor at Cornell Law School and Cornell Tech, and his interdisciplinary background makes the paper accessible to lawyers. The paper presents three case studies of the use of PL theory for law and ten promising topics for potential research. This review will introduce several examples that resonate with a tax audience. Please note that I edited some examples to make them accessible to a broader tax audience.

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July 22, 2022 in Christine Kim, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Columbia Journal Of Tax Law Publishes New Issue

The Columbia Journal of Tax Law has published Vol. 13, No. 2 (Summer 2022):

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July 22, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Thursday, July 21, 2022

Columbia Journal Of Tax Law Publishes New Issue

The Columbia Journal of Tax Law has published Vol. 13, No. 1 (Winter 2021):

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July 21, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Heminway: Change Leadership And The Law School Curriculum

Joan MacLeod Heminway (Tennessee; Google Scholar), Change Leadership and the Law School Curriculum, 62 Santa Clara L. Rev. 43 (2022):

ChangeLawyers, as inherent and frequent leaders in professional, community, and personal environments, have a greater-than-average need for proficiency in change leadership. In these many settings, lawyers are charged with promoting, making, and addressing change. For example, one commentator observes that, “as stewards of the family justice system and leaders of change, family law attorneys have an ongoing responsibility to foster continuous system improvement.” Change is part of the fabric of lawyering, writ large. Change leadership, whether voluntarily assumed or involuntarily shouldered, is inherent in the lawyering task. Yet, change leadership—well known as a focus for attention in management settings and related academic literature—is rarely called out for individual or focused attention in the traditional law school curriculum. This article presents a brief argument for the intentional and instrumental teaching of change leadership to law students.

Conclusion
“If law schools seriously intend to prepare the next generation of leaders,” Professor Thompson avers, “they must recognize and embrace the duty to start this process of learning by exposing law students to leadership concepts and lessons through their pedagogy and substantive discussions.” Overall, we can do a great service to our students by introducing them to change leadership (and other common leadership processes) as well as leadership capacity, attributes, and styles. This article advocates providing law students with that introduction.

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July 21, 2022 in Legal Ed Scholarship, Legal Education, Scholarship | Permalink

Black Law Student Attrition In The Age Of Affirmative Action: Why America's Current Diversity Framework Is Failing

Damon Christopher Williams (J.D. 2021, Toledo), Comment, Black Law Student Attrition in the Age of Affirmative Action: Why America's Current Diversity Framework Is Failing, 52 U. Tol. L. Rev. 653 (2021):

Black law students encounter unique obstacles that leave them with some of the highest non-transfer attrition rates among all groups. Theories have emerged alleging that Black law students are simply ill-suited for the educational environments they are accepted into. However, these theories fail to acknowledge the added pressures that accompany being a Black law student. The systems of racial discrimination present today, created in slavery and written into the laws Americans live by, have long been present in America’s educational
history. These systems create atmospheres where Black law students struggle to integrate. Without more, Affirmative Action as it stands is ill-equipped to fix the existing systems. As a result, the racially discriminatory effects Affirmative Action programs are trying to eradicate are cited as justifications for removing “unnecessary” Affirmative Action policies.

Indeed, when more than one out of every ten Black, first-year, law students drops out, the solution is not to end Affirmative Action; when 9% of the first-year population is Black, and 15.5% of all first-year attrition is by Black students, the solution is not to send Black law students to substandard schools; and when the attrition rate for White students is less than half of the attrition rate for Black students, the solution is not to “do nothing” with them.

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July 21, 2022 in Legal Ed Scholarship, Legal Education, Scholarship | Permalink

Wednesday, July 20, 2022

Weiss: Opportunity Zones, 1031 Exchanges, And Universal Housing Vouchers

Brandon M. Weiss (American), Opportunity Zones, 1031 Exchanges, and Universal Housing Vouchers, 110 Cal. L. Rev. 179 (2022):

California Law ReviewThe Tax Cuts and Jobs Act of 2017 contained former President Trump’s signature economic development initiative: the Opportunity Zone program. Allowing a deferral of capital gains tax for certain qualifying investments in low-income areas, the Opportunity Zone program aims to spur economic development by steering capital into economically distressed neighborhoods. The program is the latest iteration of an overly simplistic market-based approach to community development—an approach that transcends political party—based on a flawed yet enduring notion that mere proximity of capital will solve deeply entrenched issues of poverty and racial inequity. In reality, the legacy of Opportunity Zones is likely to be one of accelerated neighborhood gentrification left in the wake of wealthy taxpayer windfalls. 

Opportunity Zones are more akin to a classic tax shelter than an effective anti-poverty strategy. They share a fundamental DNA with a much older real estate-related tax break, § 1031 like-kind exchanges, which allow for the nonrecognition of gains for certain qualifying transactions that involve trading one piece of real estate for another. Section 1031 is one of the largest corporate tax expenditures in the U.S. tax code. Yet, as examined in this Article, the four primary theoretical bases upon which § 1031 rests—measurement, administrability, liquidity, and economic stimulus—have eroded over time and are ultimately unpersuasive.

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July 20, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Tuesday, July 19, 2022

Heminway: Leadership For The Transactional Business Law Student

Joan MacLeod Heminway (Tennessee; Google Scholar), Leadership for the Transactional Business Law Student, 22 Transactions: Tenn. J. Bus. Law 311 (2022): 

We do not always acknowledge this in legal education, but our students are learning to be leaders, because lawyers are leaders. That is as true of transactional business lawyers as it is of litigators, lawyers who hold political or regulatory appointments, lawyers engaged with compliance, and lawyers in general advisory practices. Yet, most law schools do little, if anything, to teach law students about leadership, or allow them to explore the contours and practices of lawyer leadership.

This edited transcript explains the importance of teaching leadership skills, traits, and processes to transactional business law students and offers insights on how instructors in a law school setting might engage in that kind of teaching as part of what they do. 

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July 19, 2022 in Legal Ed Scholarship, Legal Education, Scholarship | Permalink

Cain: Taxation Of Tort Damages

Patricia A. Cain (Santa Clara), Taxation of Tort Damages, 75 Okla. L. Rev. ___ (2022):

Under Section 104(a)(2) of the Internal Revenue Code, damages for personal injury can only be excluded from income in cases in which the plaintiff is physically injured. If the plaintiff instead suffers emotional distress from the injury, even if the distress is so great that it results in physical injury or physical sickness, then all damages are taxable. This “physical injury” or “physical sickness” requirement was added to Section 104(a)(2) in 1996. This article, as many before it have done, questions the wisdom of that intended bright line. It does so by exploring the history in tort law of the treatment of emotional distress injuries, which used to require a physical injury for recovery. Tort law has moved beyond that strict requirement, whereas tax law seems to have moved backwards. Interestingly, the physical injury does not need to be that of the taxpayer. Wrongful death and loss of consortium damages are excluded even though the taxpayer’s only injury is an emotional one. Finally, the article questions the soundness of a recent Ninth Circuit opinion, Blum v. Commissioner, upholding a Tax Court opinion, that ruled that malpractice damages could not be excluded because the lawyers did not physically harm the plaintiff.

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July 19, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Why Small Taxpayers Should Receive A De Minimis Exemption From The GILTI Regime

Patrick Riley Murray (J.D. 2022, Minnesota), Note, Size Matters (Even If the Treasury Insists It Doesn’t): Why Small Taxpayers Should Receive a De Minimis Exemption from the GILTI Regime, 106 Minn. L. Rev. 1625 (2022):

Minnesota Law Review (2021)The Tax Cuts & Jobs Act drastically altered the U.S. international tax landscape. Among its most significant changes is the implementation of the Global Intangible Low-Taxed Income (GILTI) regime. GILTI attempts to increase the U.S. tax base by preventing both the offshoring of intangible assets and the avoidance of U.S. tax. Though aimed at large multinational corporations, GILTI also applies to small businesses.

Through inordinately complex methods, GILTI mandates controlled foreign corporations to artificially reverse engineer their intangible income, and it requires the U.S. shareholders of those corporations to include that artificial amount in gross income. GILTI also imposes new, onerous reporting requirements that are applicable from the first dollar of income. When the Treasury proposed its GILTI regulations, small taxpayers asked for relief. But the Treasury balked, using loopholes within the Regulatory Flexibility Act to avoid legally mandated analysis on the effects of its regulations on small businesses.

This Note discusses the incongruity of the GILTI regime’s purposes with its effects on U.S. citizens who reside abroad and own a business.

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July 19, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Monday, July 18, 2022

Cain: Taxation Of Unmarried Partners

Patricia A. Cain (Santa Clara), Taxation of Unmarried Partners, 99 Wash. U. L. Rev. ___ (2022):

Wash U Law ReviewThe number of unmarried couples in the United States has been steadily increasing. While living together these partners often make property transfers between each other. And, when the relationship ends, either during their joint lifetimes or at the death of one partner, even more property transfers are likely to occur. Yet, there are no clear tax rules that apply to these transfers. Traditional tax rules typically characterize most of these transfers either as taxable gifts or as taxable income. This article argues that it is time to rethink those rules. Since federal tax law follows state property law to determine tax consequences of property divisions and transfers, the growing body of property law rules that apply to unmarried couples needs to be examined more closely to determine how they might affect certain tax consequences. 

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July 18, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Politicians Avoid Tax Increases Around Elections

Andrew C. Chang (Federal Reserve; Google Scholar), Linda R. Cohen (UC-Irvine), Amihai Glazer (UC-Irvine) & Urbashee Paul (Northeastern), Politicians Avoid Tax Increases Around Elections:

We use new annual data on gasoline taxes and corporate income taxes from U.S. states to analyze whether politicians avoid tax increases in election years. These data contain 3 useful attributes: (1) when state politicians enact tax laws, (2) when state politicians implement tax laws on consumers and firms, and (3) the size of tax changes. Using a pre-analysis research plan that includes regressions of tax rate changes and tax enactment years on time-to-gubernatorial election year indicators, we find that elections decrease the probability of politicians enacting increases in taxes and reduce the size of implemented tax changes relative to non-election years. We find some evidence that politicians are most likely to enact tax increases right after an election.

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July 18, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Lesson From The Tax Court: The Difference Between Rejecting An OIC And Reviewing A Rejection

Camp (2021)Tax collection is a process, not an event.  The process can last ten years or more.  During that time many different events may occur.  Different events may bring with them different decision-makers within the IRS.  The secret sauce of representing clients is that when you hit an unfavorable decision-maker, try to find a new one.  An example of that is getting a CDP hearing.  CDP hearings allow taxpayers to pause collection while they ask for alternatives to full collection, such as Offers In Compromise (OICs).  The CDP hearing is conducted by a Settlement Officer (SO) in the IRS Independent Office of Appeals (Appeals).

Thus, the SO represents a new layer of decision-making.  But what do you get with this new decision-maker?  Today’s lesson teaches that you may not get what you think.

Michael D. Brown v. Commissioner, 158 T.C. No. 9 (June 23, 2022) (Judge Lauber), address what I think is a common misconception about CDP hearings: that Appeals makes decisions about collection alternatives.  It does not.  It reviews decisions made by the relevant IRS function.  At issue in Brown was whether the IRS waited more than two years to reject his OIC, which was proposed as part of a CDP hearing.  If so, then his low-ball OIC would be deemed accepted under §7122(f).  Although the IRS unit that evaluated his OIC rejected it after a few months, the formal Appeals decision in the CDP hearing came more than two years later.  Mr. Brown went to Tax Court, claiming the benefit of §7122(f).  The Tax Court said no.  Appeals did not reject the OIC; all it was doing was reviewing the rejection decision made by the IRS.

This was not a slam dunk win for the IRS.  I think it’s worth your time to see why.  Details below the fold.

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July 18, 2022 in Bryan Camp, New Cases, Scholarship, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (0)

Sunday, July 17, 2022

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 paper returning to the list at #5:

  1. SSRN Logo (2018)[598 Downloads]  Tax Administration and Technology: From Enhanced to No-Cooperation?, by João Félix Pinto Nogueira (Catholic University Portugal & IBFD; Google Scholar)
  2. [461 Downloads]  Tax Neutrality Regimes and GloBE, by Leopoldo Parada (Leeds; Google Scholar)
  3. [306 Downloads]  Congress Takes Its War On Cash To Digital Assets: Understanding Tax Code Section 6050I, by Abraham Sutherland (Virginia; Google Scholar)
  4. [289 Downloads]  The Treatment of Tax Incentives under Pillar Two, by Belisa Ferreira Liotti (Google Scholar), Joy Waruguru Ndubai, Ruth Wamuyu, Ivan Lazarov (Google Scholar) & Jeffrey Owens (all of Vienna University of Economics and Business)
  5. [250 Downloads]  Preventing Unacceptable Tax Treaty Overrides, by Craig Elliffe (Auckland; Google Scholar)

July 17, 2022 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink