Paul L. Caron
Dean


Tuesday, October 22, 2019

AEI Hosts Panel Discussions Today On The Tax Cuts And Jobs Act

The American Enterprise Institute hosts a panel discussion today on Trump’s Tax Reform Happened: Now What? A Panel Discussion on the Tax Cuts and Jobs Act (live stream at 2:00 - 4:00 pm EST here):

AEI (2016)At the end of 2017, the passage of the Tax Cuts and Jobs Act (TCJA) brought the most sweeping overhaul of the US tax code in decades. At the time, projected effects and opinions were diverse and relatively uncertain, even among leading thinkers in the field. Now more than a year and half since its enactment, we are asking top tax experts from across the ideological spectrum to answer a variety of questions about this major tax overhaul — such as the impact on households, the corporate rate, the impact on inequality, deficit effects, long-term growth, and more.

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October 22, 2019 in Conferences, Scholarship, Tax, Tax Conferences, Tax Scholarship | Permalink | Comments (0)

Monday, October 21, 2019

100th Lesson From The Tax Court: The Role Of Innocence In § 6015 Spousal Relief

Happy 100thAuthor's Note:  This is my 10oth Lesson published on TaxProfBlog.  I continue to be very grateful to Paul for this opportunity.  I have learned loads from the cases and I enjoy sharing what I learn. 

Editor's Note:  I am very grateful to Bryan for the great work he has done on these weekly posts. Bryan has developed a huge following among tax academics and practitioners: his Lessons From The Tax Court are invariably among the most popular posts each week, and cumulatively have been viewed 2.6 million times (26,000 page views per post).

Section 6015 is not titled “Innocent Spouse Relief.”  It is titled “Relief From Joint and Several Liability on Joint Return.”  And you will not find the word “innocent” (or any cognate) in the statute’s text.  But we still call the relief granted by §6105 “innocent spouse relief.”  Two cases from last week teach why.  In Habibe Kruja (Petitioner), Ermir Kruja (Intervenor) v. Commissioner, T.C. Memo. 2019-136 (Oct. 15, 2019) (Judge Buch) the Tax Court granted partial relief under §6105(c).  In Lori D. Sleeth (Petitioner), David T. Sleet (Intervenor) v. Commissioner, T.C. Memo. 2019-138 (Oct. 15, 2019) (Judge Goeke), the Court denied relief under §6015(f).  Both cases show that the idea of innocence plays an important, if often implied, role in the application of §6015.  Details below the fold.

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October 21, 2019 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (4)

Sunday, October 20, 2019

The Top Five New Tax Papers

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

  1. SSRN Logo (2018)[1,945 Downloads]  Taxing the Rich: Issues and Options, by Lily Batchelder (NYU) & David Kamin (NYU)
  2. [429 Downloads]  An Introduction to Tax Careers for J.D.s, by Heather Field (UC-Hastings)
  3. [157 Downloads]  Digital Service Taxes and the Broader Shift From Determining the Source of Income to Taxing Location-Specific Rents, by Daniel Shaviro (NYU) (reviewed by Young Ran (Christine) Kim (Utah) here)
  4. [149 Downloads]  Education Planning and the SECURE Act: Creating a Tax Law Paradox, by Ross Riskin (American College of Financial Services)
  5. [125 Downloads]  Taxing Wealth in an Uncertain World, by Daniel Hemel (Chicago) (reviewed by Mirit Eyal-Cohen (Alabama) here)

October 20, 2019 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink | Comments (2)

Friday, October 18, 2019

Weekly SSRN Tax Article Review And Roundup: Layser Reviews Does Government Play Favorites? Evidence From Opportunity Zones

This week, Michelle Layser (Illinois) reviews Ofer Eldar (Duke) and Chelsea Garber (Duke), Does Government Play Favorites? Evidence from Opportunity Zones (Oct. 3, 2019).

Layser (2018)

With the 2020 Census on the horizon, investors nationwide have been lobbying states to expand the areas designated for tax preferred investment under the federal Opportunity Zones law. In 2017, state governors selected 8,764 census tracts for Opportunity Zone designation. These tracts were selected from a pool of 30,981 low-income census tracts and 10,237 contiguous tracts that were eligible under the federal statute. Whether the IRS will permit states to expand or revisit their Opportunity Zone designations after the Census is yet to be seen. In the meantime, Professors Ofer Eldar and Chelsea Garber have provided a fascinating quantitative analysis of factors that may have driven the initial designation process.

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October 18, 2019 in Michelle Layser, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Book Presents Administrative Burdens, Sludge, And Individual Taxpayer Rights Today At Florida

Leslie Book (Villanova) presents Administrative Burdens, Sludge, and Individual Taxpayer Rights (with Keith Fogg (Harvard)) at Florida today as part of its Tax Colloquium Series:

Book (2019)The tax system designed by Congress imposes significant administrative burdens on taxpayers. Decisions by the IRS regarding how it administers the tax laws can add to the burdens imposed by Congress. The administrative burdens are consequential and hurt some people, especially lower or moderate-income individual taxpayers, more than others. While the IRS strives to measure and reduce the time and money that taxpayers spend to comply with their tax obligations, the IRS does not consider the effect that administrative burdens have on taxpayer rights, including the right to be informed, the right to pay no more than the correct amount of tax, and the right to a fair and just tax system. In this article, building on the work of public administration scholars Pamela Herd and Don Moynihan, we discuss the concept of administrative burdens and reveal specific examples of how IRS actions and inaction have burdened taxpayers and jeopardized taxpayer rights.

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October 18, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Hemel & Weisbach: The Behavioral Elasticity Of Tax Revenue

Daniel Hemel (Chicago) & David A. Weisbach (Chicago), The Behavioral Elasticity of Tax Revenue:

This article presents a new measure of the efficiency consequences of tax policies and explains how this new measure can shed light on a wide range of tax law debates. We build upon the “elasticity of taxable income” approach pioneered by public finance scholars over the last quarter century and extend that approach to address complex tax systems with multiple rates, multiple bases, and administrative and compliance costs. The resulting measure — the behavioral elasticity of taxable income, or BETR — captures the change in real resources available to society caused by any marginal change in tax rates, the tax base, or tax enforcement. We argue that the BETR can serve as a guide to a wide range of tax policy issues, and we illustrate the BETR’s utility by applying it to questions such as the proper treatment of mixed personal/business expenses, the appropriate aggressiveness of efforts to address tax shelters, and the optimal mix of audits, recordkeeping and reporting requirements, and penalties.

We also consider the relationship between the BETR and the distributive aims of tax law. While the BETR is a measure of efficiency and not distribution, the BETR can aid policymakers in deciding both how much to redistribute and how to accomplish distributive objectives most efficiently. We end with reflections on the implications of the BETR for the design of non-tax legal rules.

October 18, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (1)

Thursday, October 17, 2019

Kleiman Presents Tax Limits And The Future Of Local Democracy Today At Northwestern

KleimanAriel Jurow Kleiman (San Diego) presents Tax Limits and the Future of Local Democracy, 133 Harv. L. Rev. ___ (2019), at Northwestern today as part of its Advanced Topics in Taxation Colloquium Series hosted by Herbert Beller, David Cameron, Charlotte Crane, Sarah LawskyAjay MehrotraPhilip Postlewaite, and Jeffrey Sheffield:

Property tax limits are state-level laws that place caps on local governments’ tax rates and revenue. These statutory limits, which put pressure on already strapped cities and counties in forty-six states, present an inexorable dilemma for local policymakers. On the one hand, they may cause cuts to vital services, bankruptcy, and reliance on regressive revenue sources. At the same time, however, tax limits may reflect genuine concerns about government profligacy and nonresponsiveness. While much research has focused on the first side of the dilemma—examining the laws’ fiscal consequences—this Article explores the second, probing how tax limits affect the distribution of political power between local voters and policymakers.

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October 17, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Yale & Polsky: Taxing Residential Solar

Ethan Yale (Virginia) & Gregg D. Polsky (Georgia), Taxing Residential Solar:

Residential solar systems are becoming commonplace in many regions of the United States. Use of such systems raises issues in tax doctrine and policy that are not well appreciated and have not yet been systematically analyzed. The goals of this article are threefold: (1) to identify the main issues and to organize them into a coherent framework, (2) to analyze the doctrinal and policy ramifications of present law, and (3) to suggest improvements to present law.

Solar

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

Foreign Corruption Of The Political Process Through Social Welfare Organizations

Norman I. Silber (Hofstra), Foreign Corruption of the Political Process Through Social Welfare Organizations, 114 Nw. U. L. Rev. ___ (2019):

Social welfare organizations are prohibited from channeling foreign contributions to favored political candidates. Prospects for enforcing this prohibition, however, are uncertain. Do federal election laws or tax laws provide effective tools? Are state authorities equipped to hold a nonprofit culpable as an entity, or to hold a manager or board member responsible? These questions are important to understand whether the existing rules safeguard the nonprofit community and the fairness of elections. This Essay concludes that federal tax and election rules are likely to be less effective than the authority vested with state attorneys general to monitor and hold accountable nonprofits and their officers and directors who become vehicles for foreign interference in national elections.

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

Wednesday, October 16, 2019

Kane Presents The Global Battle To Capture Multinational Enterprise Profits Today At Pennsylvania

Mitchell Kane (NYU) presents Collecting the Rent: The Global Battle to Capture MNE Profits, 72 Tax L. Rev. ___ (2019) (with Joseph Bankman (Stanford) & Alan Sykes (Stanford)) (reviewed by David Elkins (Netanya) here) at Pennsylvania today as part of its Tax Law and Policy Workshop Series hosted by Michael Knoll, Chris Sanchirico, and Reed Shuldiner:

Kane (2018)Multinational enterprises (MNEs) often earn substantial profits, or "economic rents." Often, these MNEs are domiciled in the United States, and the rents derive from ownership of intellectual property. These MNEs have structured their affairs to pay little taxes to countries outside the United States or otherwise to share their rents in these countries. Apple and Microsoft, for example, may earn roughly half their profits outside the United States but do not pay significant amounts of taxes to any foreign country.

The European Union and other countries have responded to this state of affairs with new tax legislation, antitrust actions, and other policies that have the effect of, and perhaps the intention of, capturing a greater share of MNE rents for their treasuries or citizens. To date, these policies are discussed in separate literatures focused on a particular policy domain (tax, antitrust, and so on). This paper offers the first unified or comparative analysis of the issue.

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October 16, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Shaviro Presents Digital Service Taxes Today At Toronto

Daniel Shaviro (NYU) presents Digital Service Taxes and the Broader Shift from Determining the Source of Income to Taxing Location-Specific Rents at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:

Shaviro (2018)In recent decades, a number of fantastically successful, mainly American, multinational entities (MNEs) — led and epitomized by the “Four Horsemen,” Apple, Amazon, Facebook, and Google — have risen to global economic hyper-prominence. While their market capitalizations and profits are high, reflecting that they earn substantial rents or quasi-rents, their aggregate global taxes are generally quite low, reflecting their ability to create stateless income.

Often, these MNEs are technology companies, like the Four Horsemen – but not always. Starbucks, for example, enjoys high global profits and low taxes despite its following a classic brick-and-mortar retail business model. This reflects that, like its more obviously high-tech peers, it relies on valuable intellectual property that helps it in creating both global pretax profitability and stateless income.

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October 16, 2019 in Colloquia, Scholarship, Tax, Tax Workshops | Permalink | Comments (0)

Viard Posts Two 2019 Tax Papers On SSRN

Alan D. Viard (American Enterprise Institute), Base Broadening Gone Wrong: Work-Related Costs and the TCJA, 164 Tax Notes 539 (July 22, 2019):

Tax policy scholars often advocate broadening the tax base. Not all base broadening is created equal, however. A fundamental tax policy principle, firmly grounded in economic theory, requires that an income tax allow deductions for the costs of earning income, including work-related costs. Base broadening that removes those deductions is misdirected. Unfortunately, the Tax Cuts and Jobs Act implemented that type of base broadening by suspending tax relief for moving expenses and employee business expenses for 2018 through 2025.

Alan D. Viard (American Enterprise Institute), An Economic Analysis of the TCJA's Larger Standard Deduction, 163 Tax Notes 79 (Apr. 1, 2019):

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

Tuesday, October 15, 2019

Liscow Presents Democratic Law And Economics Today At NYU

Zachary Liscow (Yale) presents Democratic Law and Economics at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

Liscow (2017)Law and economics typically analyzes ideal policies, ignoring real-world institutions and constraints. It is helpful for real-world political actors, though, to have guidance for the real world, which this Article provides for policymakers setting policy with distributional impacts. Current guidance not considering real-world constraints may significantly hamper policymakers’ effectiveness at addressing today’s crisis of inequality. Critique of law and economics is widespread, but, to provide an alternative framework for policymaking, one needs to start with an account of its failures that can provide such an alternative framework. This Article provides such an account of the failures and an alternative framework.

This Article explores a major dissonance between expert and lay policy views: the set of tax prescriptions required by law and economics is sharply at odds with ordinary citizens’ psychology about taxes. While standard economic reasoning views taxes solely as a system of incentives and redistribution, many ordinary people also think of taxes as rewarding desert—as recent rigorous survey experiments, advances in the economics of taxation, and decades of experience show. Desert-based tax views limit redistribution, since the poor are deemed to not deserve free cash and the rich are deemed to deserve some of their income. A democracy where Congress is attentive to such tax views will need to look elsewhere to achieve distributive justice.

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October 15, 2019 in Colloquia, Scholarship, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Rosenbloom & Shaheen: The TCJA And Tax Treaties

H. David Rosenbloom (NYU) & Fadi Shaheen (Rutgers), The TCJA and the Treaties, 95 Tax Notes Int'l 1057 (Sept. 9 2019):

This article addresses the interaction of U.S. income tax treaties and certain changes made by the Tax Cuts and Jobs Act to the international provisions of the corporate income tax. The article makes four main points. First, it explains why the participation exemption, the global intangible low-taxed income (GILTI) regime, and the transition tax on deemed repatriations of deferred foreign earnings are compatible with provisions of U.S. treaties allowing for relief from international double taxation. Second, it explains why the disallowance of deductions for foreign related-party interest or royalty payments in hybrid transactions or with hybrid entities is compatible with treaty nondiscrimination provisions. Third, the article explains why the foreign-derived intangible income (FDII) regime, the (arguable) disallowance of a statutory foreign tax credit (FTC) with respect to hybrid dividends not benefiting from the participation exemption, and the repeal of IRC section 902 are inconsistent, but not in conflict, with U.S. treaty provisions on nondiscrimination and relief from double taxation, and therefore raise no treaty override questions.

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October 15, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Monday, October 14, 2019

Lesson From The Tax Court: No § 911 Exclusion For Taxpayers With U.S. Abode

Tax Court (2017)In several Lessons From The Tax Court (here, here, and here) we have seen how the concept of a tax home is important for deciding when §162 allows a deduction for the expenses of travel away from home.  The lessons teach that a tax home is where one must live to earn a living.  One’s personal choice of abode may or may not be one’s tax home.  That is the law for §162 purposes.  For §911 purposes, however, Congress has made the taxpayer’s personal choice of abode part of the definition of tax home.  That definition is what tripped up the taxpayers in Joseph S. Bellwood And Jacqueline E. Bellwood v. Commissioner, T.C. Memo 2019-135 (October 7, 2019)(Judge Gustafson) and in James M. Cambria v. Commissioner, T. C. Summary Opinion 2019-28 (September 30, 2019)(Judge Nega).  Details below the fold.

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October 14, 2019 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (1)

Sunday, October 13, 2019

UC-Davis/ACTEC Symposium: An Empirical Analysis Of Wealth Transfer Law

The UC Davis Law Review hosted its 53rd annual symposium on Friday on An Empirical Analysis of Wealth Transfer Law,  co-sponsored by the ACTEC Foundation (call for papers here): 

ACTEC-UCDavis (2019)Panel #1: Marriage

  • David Horton (UC-Davis) (moderator)
  • Naomi Cahn (George Washington), What's Wrong about the Elective Share Right
    Commentator: Shayak Sarkar (UC-Davis)
  • Alyssa DiRusso (Samford), Using Empirical Data on the Widowhood Effect to Optimize Simultaneous Health Law and Drafting
    Commentator: Andrea Chandrasekher (UC-Davis)
  • Russell James (Texas Tech), Empirical Analysis of Charitable Bequest Transfers: A Comprehensive Review, New Findings, and the Emerging Potential of Longitudinal Data
  • Jeffrey Pennell (Emory), Individuated Determination of a Surviving Spouse's Elective Share

Panel #2: Research Using Probate Records

  • Adam Hirsch (San Diego) (moderator)
  • Bridget Crawford (Pace), What Probate Courts Cite: A Study of the New York County Surrogate's Court 2017-2018
    Commentator: Donna Shestowsky (UC-Davis)
  • David Horton (UC-Davis), Do-It-Yourself-Wills
    Commentator: Alexander Boni-Saenz (Chicago-Kent)
  • Alberto Lopez (Alabama), Antebellum and Postbellum Testamentary Transfers in Three Kentucky Counties
  • Reid Kress Weisbord (Rutgers), Fiduciary Authority and Liability in Probate Estates: An Empirical Analysis
    Commentator: Jane Baron (Temple)

Panel #3: Nonprobate Transfers, Estate Planning, and Intestacy

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October 13, 2019 in Conferences, Scholarship, Tax, Tax Conferences, Tax Scholarship | Permalink | Comments (0)

The Top Five New Tax Papers

SSRN Logo (2018)There is a quite a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with new papers debuting on the list at #4 and #5:

  1. [1,899 Downloads]  Taxing the Rich: Issues and Options, by Lily Batchelder (NYU) & David Kamin (NYU)
  2. [412 Downloads]  An Introduction to Tax Careers for J.D.s, by Heather Field (UC-Hastings)
  3. [171 Downloads]  The Qualified Small Business Stock Exclusion: How Startup Shareholders Get $10 Million (Or More) Tax-Free, by Manoj Viswanathan (UC-Hastings)
  4. [127 Downloads]  Digital Service Taxes and the Broader Shift From Determining the Source of Income to Taxing Location-Specific Rents, by Daniel Shaviro (NYU)
  5. [126 Downloads]  Education Planning and the SECURE Act: Creating a Tax Law Paradox, by Ross Riskin (American College of Financial Services)

October 13, 2019 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink | Comments (0)

Friday, October 11, 2019

Weekly SSRN Tax Article Review And Roundup: Kim Reviews Shaviro's Digital Services Taxes

This week, Young Ran (Christine) Kim (Utah) reviews a new work by Daniel Shaviro (NYU), Digital Service Taxes and the Broader Shift from Determining the Source of Income to Taxing Location-Specific Rents.

KimEarlier this week, the OECD released the Secretariat Proposal for a "Unified Approach" for the new tax nexus and profit allocation rules to address the tax challenges of the increasingly digitalized economy. The proposal covers highly digitalized business models, but is increased in scope to include consumer-facing businesses. The Unified Approach creates 1) a new nexus rule, not dependent on physical presence and instead largely based on sales, and 2) a new profit allocation rule using a formulaic approach to determine a share of residual, or non-routine, profit allocated to market countries. In addition, if a taxpayer has a traditional nexus in the market country, an additional amount of profit consisting of a fixed return for certain baseline marketing and distribution functions that take place in the market country may further be allocated to the market country. In exchange for this new taxing right of market countries, the countries should agree to a binding and effective dispute prevention and resolution mechanism even if there might be cases where there are more functions in the market countries—that is, more allocable profits to market countries—than the baseline marketing and distribution functions.

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October 11, 2019 in Christine Kim, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (1)

Thursday, October 10, 2019

Fleming Presents Is Unilateral Formulary Apportionment Better Than The Status Quo? Today In Vienna

Cliff Fleming (BYU) presents Is Unilateral Formulary Apportionment Better Than the Status Quo? (with Robert Peroni (Texas) & Stephen Shay (Harvard)) at the Institute for Austrian and International Tax Law of the Vienna University of Economics and Business:

FlemingIt’s doubtful that the world’s large-economy countries will adopt formulary apportionment in a coordinated movement that yields a uniform regime. The more likely scenario is that a formulary apportionment adopter will be a unilateral actor winding up with a system that does not mesh well with the systems of its major trading partners.

This paper points out that formulary apportionment does not require adoption of a territorial system. Formulary apportionment can be used in a worldwide regime to identify foreign-source income for foreign tax credit purposes. Thus, the unilateral adoption issue, with its uncoordinated results, is relevant even for countries that contemplate maintaining some form of worldwide taxation with a limited foreign tax credit.

This paper’s principal purpose is to examine and evaluate the factors that any country must consider when contemplating replacement of the arm’s-length approach with formulary apportionment. Among those factors are:

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October 10, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (1)

The Geometry Of International Tax Planning After The Tax Cuts And Jobs Act

Michael P. Donohoe (Illinois), Gary A. McGill (Florida) & Edmund Outslay (Michigan State), The Geometry of International Tax Planning After the Tax Cuts and Jobs Act: A Riff on Circles, Squares, and Triangles, 72 Nat'l Tax J. ___ (2019):

The enactment of the so-called Tax Cuts and Jobs Act of 2017 (TCJA) significantly changes the landscape for tax planning and compliance by U.S. multinational corporations (MNCs). The promised shift to a more territorial system actually results in a greater likelihood that more of a U.S. MNC’s foreign income is subject to current U.S. taxation. The TCJA complicates effective tax planning for such firms, forcing them to reexamine their existing global structures and financial arrangements (i.e., the “geometry” of international tax planning). We briefly review international tax planning before the TCJA as well as some key international tax provisions in the TCJA.

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

Borden: Section 1031 Exchanges And The 20% Section 199A Business Deduction

Bradley T. Borden (Brooklyn), Section 1031 Exchanges and the 20 Percent Business Deduction under IRC Section 199A, Prob. & Prop., Vol. 33, No. 58, Sep./Oct. 2019:

Section 199A provides a deduction equal to 20 percent of qualified business income. Only income from a qualified trade or business qualifies for the deduction, and the deduction is subject to limits based upon the w-2 wages paid by the business and the unadjusted basis of property owned by the business. Several issues arise with respect to the section 199A deduction and section 1031. This article addresses three of those issues:

  1. the effect year-straddling exchanges have on the unadjusted basis limit;
  2. the section 199A unadjusted basis of replacement property; and
  3. the extent to which real property ownership is a qualified trade or business under section 199A.

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

Wednesday, October 9, 2019

Faulhaber: The Future Of Digital Taxation

Lilian V. Faulhaber (Georgetown), Taxing Tech: The Future of Digital Taxation, 40 Va. Tax Rev. ___ (2020):

In recent months, France and the United Kingdom have announced new taxes that are designed to target large multinational tech companies. In response, the United States has threatened trade sanctions.

This Article introduces the larger context of this controversy. The French and U.K. taxes are merely two examples of a much larger trend that has been taking place over the last several years, with countries around the world designing tax measures to target the so-called “digital economy” without ever determining what the digital economy is or how it differs from the rest of the economy.

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

Should The U.S. Adopt The Common Reporting Standard?

Noam Noked (Chinese University of Hong Kong, Faculty of Law), Should the United States Adopt CRS?, 118 Mich. L. Rev. Online 118 (2019):

Michigan Law Review LogoThe United States’ one-sided approach to tax transparency might lead to an unprecedented clash with the European Union (EU) in the near future. In light of the EU’s deadline for the United States, the U.S. Treasury and Congress should urgently engage in a discussion on whether the United States should adopt the Common Reporting Standard (CRS) for automatic exchange of financial account information. A recent report from the U.S. Government Accountability Office considered this issue and did not recommend adopting CRS.

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October 9, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (1)

Analyzing Gun-Violence-Prevention Taxes Under Emerging Firearm Fee Jurisprudence

Hannah Shearer & Allison Anderman (Giffords Law Center to Prevent Gun Violence), Analyzing Gun-Violence-Prevention Taxes Under Emerging Firearm Fee Jurisprudence, 43 S. Ill. U. L.J. 157 (2018):

Gun and ammunition taxes and fees have long been used to fund wildlife conservation programs and regulatory schemes that ensure guns are being purchased and possessed lawfully. In recent years, taxes have been proposed as a policy tool to help mitigate the staggering social and economic costs of gun violence by providing a reliable source of funding for gun safety and violence prevention programs. These proposed “gun-violence-prevention taxes” have been met with opposition, including from Second Amendment litigants who argue that courts should strike down gun and ammunition taxes under the Supreme Court’s First Amendment fee jurisprudence — a body of cases examining taxes on protected expressive or religious activity. This Article aims to evaluate that argument under accepted principles of both First and Second Amendment law. Although just ten years have passed since Heller recognized an individual right to possess handguns in the home for self-defense, this Article argues that enough is known about the history of gun and ammunition taxes, the differences between the First and Second Amendments, and the decade of post-Heller lower-court jurisprudence to conclude that most proposed gun-violence-prevention taxes are constitutional.

October 9, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (2)

Tuesday, October 8, 2019

Pratt Presents The Curious State Of Tax Deductions For Fertility Treatment Costs Today At NYU

Katherine Pratt (Loyola-L.A.) presents The Curious State of Tax Deductions for Fertility Treatment Costs, 28 S. Cal. Rev. L. & Soc. Just. 261 (2019) (reviewed by Sloan Speck (Colorado) here), at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

Pratt (2017)The federal tax treatment of assisted reproductive technology (ART) expenses incurred by intended parents is unclear. This lack of clarity in the tax law is curious because millions of intended parents have incurred ART expenses, which typically are quite large, over the past 40 years. ARTs include in vitro fertilization (IVF), intracytoplasmic sperm injection (ICSI), egg donation, and surrogacy. This Article addresses the question of whether various categories of taxpayers can classify the costs of specific types of ART expenses as tax deductible “medical care,” taking into account new developments in the law, including the 2017 federal appellate court decision in Morrissey v. United States.

Part I of this Article outlines the contours of the income tax deduction (and related tax benefits) for “medical care,” incorporating the statutory definition of “medical care” and the interpretation of that definition by the Internal Revenue Service (IRS) and courts. Part II applies the “medical care” definition to expenses incurred by different-sex married couples for specific types of reproductive medical care and ancillary payments. We begin our analysis with this cohort of intended parents because the IRS seems to have had such taxpayers in mind when it initially provided informal advice to taxpayers who incurred fertility treatment costs. Part II then extends the analysis to same-sex couples and unmarried individuals, focusing primarily on the U.S. Tax Court decision in Magdalin v. Commissioner, and briefly summarizing Longino v. Commissioner. In both cases, the court denied fertile unmarried men a medical expense deduction for ART expenses. Part II considers the implications of Magdalin for medically infertile men, married and unmarried women, and married different-sex couples. Part II also articulates a novel argument men could make for deducting some ART costs, notwithstanding Magdalin and Longino.

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October 8, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Meet the Researchers Fighting Back Against Rogue Peer Reviewers And ‘Citation Cartels’

Following up on my previous post, The Network Of Law Reviews: Citation Cartels, Scientific Communities, And Journal Rankings:  Chronicle of Higher Education, Meet the Researchers Fighting Back Against Rogue Peer Reviewers and ‘Citation Cartels’:

Eric A. Fong’s manuscript had been conditionally accepted. The editor said Fong needed to ensure it conformed with the journal’s style and to shorten it to meet the word limit. That was easy enough. But the third condition gave Fong pause.

He’d cited only one source from the journal he’d submitted the article to. The editor wrote in an email that that was “unacceptable,” and told him to “please add at least five more.”

Adding citations to articles in the same journal, as the editor had requested, would inflate the journal’s impact factor, which often dictates a journal’s importance. It’s a phenomenon some scholars call “coercive citation,” but Fong, then an assistant professor of management at the University of Alabama at Huntsville, had never heard that term.

Still, he felt what he was being asked to do was wrong. And yet publishing this paper would be an important part of his case for tenure. Conflicted, Fong printed out the email and headed to Allen Wilhite’s office. Wilhite, Fong’s mentor and an economics professor, was stunned. Most of their colleagues were, too. A few, though, said they had received a similar request from an editor.

Coercive citation has drawn increased attention in recent years. Last month two researchers at the Dutch publishing giant Elsevier published a study, titled “When Peer Reviewers Go Rogue,” that examined the citation patterns of nearly 55,000 reviewers for its journals. They found that 433 of those reviewers — less than 1 percent — consistently had their own work cited in papers they reviewed. ...

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October 8, 2019 in Legal Ed Scholarship, Legal Education, Scholarship | Permalink | Comments (0)

Viswanathan: Hyperlocal Responses To The SALT Deduction Limitation

Manoj Viswanathan (UC-Hastings), Hyperlocal Responses to the SALT Deduction Limitation, 71 Stan. L. Rev. Online 294 (2019):

The Tax Cuts and Jobs Act, enacted in December 2017, places a $10,000 limit on the federal deduction for payments of state and local taxes (“SALT”). Several states with high numbers of adversely affected taxpayers have proposed or enacted legislative workarounds to this new cap. Much has been said about these state-level responses, but there has been little analysis of local-level effects or of how local governments could similarly respond. This essay addresses that gap by (1) statistically modeling the number of taxpayers affected by the SALT deduction limitation at a ZIP-code-by-ZIP-code (rather than state-by-state) level, and (2) proposing locality-based strategies relevant to taxpayers throughout the U.S., and not just those living in highly affected states.

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October 8, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (1)

Colinvaux & Madoff: Charitable Tax Reform For The 21st Century

Roger Colinvaux (Catholic) & Ray D. Madoff (Boston College), Charitable Tax Reform For the 21st Century, 164 Tax Notes 1867 (Sept. 16, 2019):

The article identifies two goals of the charitable giving tax incentives: promoting actual charitable work and fostering a strong culture of charitable giving with broad participation. The recent increase to the standard deduction and the rise of donor-advised funds compromise both goals. The article outlines reform proposals to bolster the charitable sector, including expanding the giving incentive to all taxpayers in the form of a credit (subject to a giving floor), allowing some tax benefits to DAF donors upon contribution but delaying the income tax deduction until DAF funds are released from advisory privileges, closing loopholes that enable foundations and donors to skirt long-standing legal requirement, and modifying incentives to foundations to foster more spending.

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

Monday, October 7, 2019

Kim Presents The Digital Services Tax: A Cross-Border Variation Of The Consumption Tax Debate? Today At Loyola-L.A.

Young Ran (Christine) Kim (Utah) presents The Digital Services Tax: A Crossborder Variation of Consumption Tax Debate at Loyola-L.A. today as part of its Tax Policy Colloquium Series hosted by Ellen Aprill and Ted Seto: 

KimAs highly digitalized business models, such as Google, Amazon, and Facebook, have been mainstreamed in the economy, the traditional profit allocation and nexus rules of taxation are further strained. Traditionally, profit is allocated to market countries when the business has physical presence there. However, highly digitalized business models can generate profits in market countries without physical presence. Thus, market countries, especially the EU, have started imposing a digital services tax (“DST”) on the gross revenue generated in jurisdictions with highly digital business models, which has ignited heated debate across the globe.

DST is criticized as “ring-fencing,” or segregating, certain digital business models, because it arguably imposes a disguised corporate income tax on the profits of only certain digital firms, which discriminates against American tech giants. However, while DST is politically driven, the criticism is largely based on practical concerns and focused on the imminent impact, such as who is the winner and loser in the short term, rather than considering DST theoretically. More importantly, there is little discussion of the consumption tax aspect of the DST. DST is a turnover tax, which is a subcategory of consumption tax levied on the gross revenue of a firm. However, strangely, there is little discussion of the theoretical value of DST as a consumption tax.

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October 7, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Lesson From The Tax Court: Payments v. Deposits

Tax Court (2017)The only thing worse than overpaying ones tax liabilities is not realizing one has overpaid until it is too late to get the overpayment refunded.  Section 6511 requires taxpayers to ask the IRS for refunds of overpayments within the later of: (1) three years after the relevant return was filed; or (2) two years after the relevant payment was made.  If no return was filed, then the two year period applies.

Section 6511, however, only applies when there has been a payment in the first place.  Not every remittance to the IRS constitutes a payment.  Sometimes taxpayers send in money without intending it to be a payment.  For example, a taxpayer might send money to simply stop the running of interest while the taxpayer pursues a protest of the amount of tax owed.  The IRS and courts call those remittances “deposits.”  The good news is that returns of deposits are not subject to the limitation periods in 6511.  The better news is that if a taxpayer is entitled to their return, the government might have to pay interest. §6603.

Thus, it is useful to learn the difference between a payment and a deposit.  In Michael C. Worsham v. Commissioner, T.C. Memo. 2019-132 (Oct. 1, 2019) (Judge Colvin) the taxpayer thought that his remittances to the IRS were not payments because he made them long before the IRS assessed the relevant taxes.  Judge Colvin makes quick work of that argument.  Perhaps too quick.  There is more to the difference between payments and deposits than the timing of the remittance.  I still think the taxpayer’s remittances in this case still might have been deposits, depending on facts not contained in the opinion.  Details below the fold.

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October 7, 2019 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (0)

Sunday, October 6, 2019

The Top Five New Tax Papers

SSRN Logo (2018)There is a quite a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with papers returning to the list at #4 and #5:

  1. [1,807 Downloads]  Taxing the Rich: Issues and Options, by Lily Batchelder (NYU) & David Kamin (NYU)
  2. [395 Downloads]  An Introduction to Tax Careers for J.D.s, by Heather Field (UC-Hastings)
  3. [155 Downloads]  The Qualified Small Business Stock Exclusion: How Startup Shareholders Get $10 Million (Or More) Tax-Free, by Manoj Viswanathan (UC-Hastings)
  4. [141 Downloads]  Intergenerational Equity, Student Loan Debt, and Taxing Rich Dead People, by Victoria Haneman (Creighton)
  5. [115 Downloads]  Cannabis Businesses and Passthrough Deduction Availability, by Daniel Rowe (Green Hasson & Janks, Los Angeles)

October 6, 2019 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink | Comments (0)

Friday, October 4, 2019

Weekly SSRN Tax Article Review And Roundup: Kleiman Reviews Kornhauser’s Conservative Women’s Groups And Tax Lobbying

This week, Ariel Jurow Kleiman (San Diego) reviews Conservative Women’s Groups & Tax Lobbying, Part 5 in Marjorie E. Kornhauser’s (Tulane) forthcoming book, American Voices in a Changing Democracy: Women, Lobbying, and Tax 1924–1936.

Stevenson“Women Start Meat Strike,” the 1935 Danville Morning News headline read.  Outraged over the rising price of meat, Detroit housewives boycotted butcher shops and ignited shared outrage among homemakers across the nation. Mary Zuk, whom the newspaper (gratuitously) describes as the “five-foot Polish American originator” of the strike and a “fiery, dark complexioned” woman, blamed the high prices in part on processing taxes levied under the Agricultural Adjustment Act (AAA). As Kornhauser explains in the fourth chapter of her forthcoming book, American Voices in a Changing Democracy, Zuk and her fellow protestors believed that butchers used these taxes as an excuse to gouge consumers. Zuk took her protest to Washington to demand repeal of the tax. Although Congress demurred, the Supreme Court later declared the tax unconstitutional.  What started as a local news headline gained national momentum, offering a colorful example of how women’s voices contributed to the burgeoning national conversation about taxes and government spending.

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October 4, 2019 in Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Brauner Presents The True Nature Of Tax Treaties Today In Vienna

Yariv Brauner (Florida) delivers the 2019 Klaus Vogel Lecture at Vienna University today on The True Nature of Tax Treaties:

Brauner (2019)Tax treaties are the building blocks of the international tax regime. Much scholarship has been devoted to them, peaking with Professor Klaus Vogel’s Magnum Opus on Double Tax Conventions. Yet, almost a century after modern tax treaties were formalized into a model, and the derivatives of that model, now over 3000 of them, dominate the tax consequences of cross-border trade and investment, there are still many unanswered fundamental questions, which roots are in the lack of a clear understanding of the true nature of tax treaties. The purpose of this article is to begin filling that void. ...

The article examines tax treaties from four different perspectives: tax treaties as creatures of international law, Tax exceptionalism as reflected in tax treaties, Tax treaties as a consequence of international negotiations, and multilateralism in a world of bilateral tax treaties.

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

Thursday, October 3, 2019

Hickman Reviews Choi's Substantive Canons Of Tax Law

Jotwell (Tax) (2016)Kristin Hickman (Minnesota), Refashioning Anti-Abuse Doctrines As Substantive Canons  (JOTWELL) (reviewing Jonathan H. Choi (NYU), The Substantive Canons of Tax Law, 72 Stan. L. Rev. ___ (2020)):

Jurists and legal scholars who think about methods and approaches for resolving questions of statutory meaning like to talk about traditional tools of statutory interpretation and the metaphorical toolbox in which those tools are kept. Textualism versus purposivism; the relative merits of text, history, and purpose; and the meaning and utility of both semantic and substantive canons are all common fodder for discussion and debate. Adding to the literature at the intersection of statutory interpretation and tax, Jonathan Choi offers an interesting and thorough treatment of why we ought to think of tax anti-abuse doctrines like the economic substance doctrine, the step transaction doctrine, and the assignment-of-income doctrine as substantive canons of statutory interpretation. (Helpfully, Choi provides a nice appendix, including footnotes, in which he catalogues substantive tax canons, including a couple of “not a canon” entries.) ...

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

Viswanathan: Lower-Income Tax Planning

Manoj Viswanathan (UC-Hastings), Lower Income Tax Planning, 2020 U. Ill. L. Rev. ___:

Tax planning is generally criticized by scholars as inefficient; that is, imposing welfare-reducing costs by incentivizing transactions with few non-tax economic benefits. This Article argues that this view is unacceptably narrow, and makes the original claim that tax planning by lower-income taxpayers is often welfare-enhancing and should, as a normative matter, be encouraged. As such, various parties, including the IRS, law school clinics, legal academics, and tax practitioners should actively strategize to reduce the transaction costs currently hindering lower-income tax planning. This Article then applies that mandate to a specific cohort of lower-income taxpayers — drivers working in the sharing economy — and proposes a strategy through which these taxpayers can take advantage of both existing tax laws and the §199A qualified business income deduction of the recently enacted Tax Cuts and Jobs Act.

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

Wednesday, October 2, 2019

Hemel Presents Phaseouts Today At Pennsylvania

Daniel Hemel (Chicago, visiting at Harvard) presents Phaseouts at Pennsylvania today as part of its Tax Law and Policy Workshop Series hosted by Michael Knoll, Chris Sanchirico, and Reed Shuldiner:

Hemel (2019)The Internal Revenue Code is replete with tax benefits that phase out with income. While phaseout provisions are widespread, their effects are little understood. Some commentators have suggested that phaseouts reduce the revenue costs and increase the progressivity of tax benefits. Other leading tax law scholars have assailed these provisions for adding complexity to the Code and for confusing taxpayers about the rates that apply to them. This article presents a comprehensive evaluation of phaseouts and arrives at a more nuanced view. The notions that phaseouts reduce cost and increase progressivity turn out largely to be accounting illusions. At the same time, the implications of phaseouts for tax system complexity and taxpayer comprehension are more ambiguous than their critics charge. Phaseouts are appropriate when the externalities or internalities generated by an activity depend on the actor’s income. Most—though not all—of the phaseouts in the Internal Revenue Code are plausibly justified on these grounds.

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October 2, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Roberts: Greenbacks For The Green New Deal

Tracey M. Roberts (Cumberland), Greenbacks for the Green New Deal, 17 Pitt. Tax Rev. ___ (2019):

Pittsburgh Tax Review (2017)The Green New Deal calls for the overhaul of our nation’s energy, transportation and manufacturing infrastructure to support the transition to a green economy, the adaptation of the built environment to climate change, the remediation of polluted areas, the conservation of fragile and threatened ecosystems, and the encouragement of sustainable farming practices. While Green New Deal proposals have been criticized as an example of “big government spending,” the U.S. has a history of huge investments when economic transformation has been required for national security and long-term prosperity. This article makes four contributions.

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

Pittsburgh Tax Review Publishes New Issue

Pittsburgh Tax Review (2017)The Pittsburgh Tax Review has published Vol. 16, No. 1 (2018):

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

Tuesday, October 1, 2019

Shaviro Presents Digital Service Taxes Today At NYU

Daniel Shaviro (NYU) presents Digital Service Taxes and the Broader Shift from Determining the Source of Income to Taxing Location-Specific Rents at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder:

Shaviro (2018)In recent decades, a number of fantastically successful, mainly American, multinational entities (MNEs) — led and epitomized by the “Four Horsemen,” Apple, Amazon, Facebook, and Google — have risen to global economic hyper-prominence. While their market capitalizations and profits are high, reflecting that they earn substantial rents or quasi-rents, their aggregate global taxes are generally quite low, reflecting their ability to create stateless income.

Often, these MNEs are technology companies, like the Four Horsemen – but not always. Starbucks, for example, enjoys high global profits and low taxes despite its following a classic brick-and-mortar retail business model. This reflects that, like its more obviously high-tech peers, it relies on valuable intellectual property that helps it in creating both global pretax profitability and stateless income.

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October 1, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

The Allure Of State VATs: The Business Value Tax

Jeremy Pilaar (Yale), Making the Most of a BVT: Lessons From New Hampshire and Michigan, 92 State Tax Notes 703 (Aug. 19, 2019):

States' corporate income taxes (CITs) have become increasingly unreliable in the past 40 years. Scholars have traced this decline to three legal shifts. First, in an effort to channel profits to individual owners, such that they are only subject to personal income taxes, many businesses have abandoned C corporation status to operate as S corporations or limited liability companies. Second, in a rush to foster “entrepreneurial climates,” states have increased their business tax breaks and lowered their real CIT rates by more than 30 percent. Third, Public Law 86-272 has prevented any state from imposing net income taxes on out-of-state businesses that solicit in-state orders for delivery from out of state.

This article argues that a form of VAT called a business value tax (BVT) can help remedy these problems. A BVT is a low-rate tax on all business activity conducted in a state over a specified period. By taxing all business endeavors rather than just profits, and sharply limiting exemptions, a BVT would address the revenue gaps the CIT leaves open. A BVT would thereby increase both revenue levels and stability. It would also escape P.L. 86-272’s restrictions. Policymakers should hence strongly consider enacting a BVT alongside their state’s CIT.

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

Monday, September 30, 2019

Roin: The Case For (And Against) Surrogate Taxation

Julie Roin (Chicago), The Case For (And Against) Surrogate Taxation:

The 2017 Tax Cut and Jobs Act significantly revised long-standing rules regarding the tax treatment of many employer provided in-kind benefits. Instead of including the value of these benefits in the recipients’ taxable income, for the most part the new rules disallow employers a deduction for the cost of providing the affected benefits. This article argues that the two components of this legislative scheme – relying on cost of provision as the measure of taxable income and on imposing the nominal tax obligation on providers rather than recipients – are distinct policy decisions.

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September 30, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Hemel & Porter: Aligning Taxes And Spending — Theory And Experimental Evidence

Daniel Hemel (Chicago) & Ethan Porter (George Washington), Aligning Taxes and Spending: Theory and Experimental Evidence:

Under what circumstances will members of the public hold positive attitudes toward new or higher taxes? While some scholars have posited that the practice of “earmarking” — designating tax revenues for a particular purpose — can increase support for taxes, the existing literature has not identified the conditions under which earmarking will prove effective in this regard. Here, we draw upon previous research on consumer behavior to hypothesize that support for earmarked taxes will be stronger when such taxes satisfy the criterion of “source–use alignment” (i.e., when the connection between the revenue source and the use for which those revenues are earmarked accords with familiar consumer fairness norms). Evidence in support of this hypothesis comes from two experiments on a sample of US residents matched to Census data, in which subjects were randomly assigned to read descriptions of hypothetical earmarked taxes with varying levels of alignment. Individuals consistently expressed stronger support for earmarked taxes that achieved source — use alignment as compared to earmarked taxes that did not satisfy the source — use alignment criterion.

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September 30, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Lesson From The Tax Court: The Proper Role Of Delay In CDP

Tax Court (2017)I often call CDP “Collection Delay Process.”  That is not pure snark.  Part of the purpose of CDP is to pause collection long enough to give taxpayers adequate time to present information to a human IRS employee and explain why the IRS should not be collecting from them.  What constitutes adequate time turns on the plausibility of the taxpayer’s story.  That is today’s lesson.  

The problem with CDP is that many, if not most, of the taxpayers who press the pause button do so simply for the purpose of delay and not for the purpose of explanation.  Time and again one finds taxpayers who invoke their CDP rights and then do nothing else.  They do not present a collection alternative, do not submit forms showing their assets and liabilities, do not respond to Appeals employee’s requests for information.  More importantly, they do not give a plausible story on why the IRS should stop collection.  Instead they give only excuses as to why they need more and more delay.

IRS employees in Appeals become jaundiced.  When so many requests lack substance, it is all too easy to start thinking that all requests lack substance.  The resulting temptation is to discount taxpayer excuses for delay and move ahead with collection. 

Two recent Tax Court opinions show both the frustrations felt by IRS Appeals employees and the dangers of assuming all taxpayers simply want delay.  Together they teach why delay is indeed a necessary part of the CDP process.  In Derrick Barron Tartt v. Commissioner, T.C. Memo 2019-112 (September 3, 2019)(Judge Lauber) the taxpayer sought delay for delay’s sake.  The case shows us the kind of situations that IRS Appeals employees see as a general rule.  In contrast, the case of Taryn L. Dodd v Commissioner, T.C. Memo 2019-107 (August 22, 2019)(also Judge Lauber) shows us the exception to the rule and why Appeals must sometimes give a taxpayer repeated and repeated and repeated opportunities to provide information.

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September 30, 2019 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (1)

Sunday, September 29, 2019

Choi: An Empirical Study Of Statutory Interpretation In Tax Law

Jonathan H. Choi (NYU), An Empirical Study of Statutory Interpretation in Tax Law, 95 N.Y.U. L. Rev. ___ (2020):

A substantial academic literature considers how agencies should interpret statutes. Yet few studies have considered how agencies actually do interpret statutes, and none has empirically compared the methodologies of agencies and courts in practice. This Article conducts such a comparison, using a newly created data-set of all IRS publications ever released, along with an existing data-set of court decisions. It applies natural language processing, machine learning, and regression analysis to map methodological trends and to test whether particular authorities have developed unique cultures of statutory interpretation.

It finds that, after Chevron, the IRS has increasingly made rules on normative policy grounds (like fairness and efficiency) rather than merely producing rules based on the “best reading” of the relevant statute (under any interpretive theory, like purposivism or textual-ism). Moreover, when the IRS does apply interpretive criteria, it has grown much more purposivist over time.

Choi 1

In contrast, the Tax Court has not grown more normative and has followed the same trend toward textualism as most other courts. But although the Tax Court has become more broadly textualist, it prioritizes different interpretive tools than other courts, like Chevron deference and holistic-textual canons. This suggests that each authority adopts its own flavor of textualism or purposivism.

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September 29, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (2)

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 #1:

  1. [1,753 Downloads]  Taxing the Rich: Issues and Options, by Lily Batchelder (NYU) & David Kamin (NYU)
  2. [513 Downloads]  Five Key Research Findings on Wealth Taxation for the Super Rich, by David Gamage (Indiana)
  3. [383 Downloads]  An Introduction to Tax Careers for J.D.s, by Heather Field (UC-Hastings)
  4. [171 Downloads]  The Superiority of the Digital Services Tax over Significant Digital Presence Proposals, by Wei Cui (University of British Columbia)
  5. [152 Downloads]  The Qualified Small Business Stock Exclusion: How Startup Shareholders Get $10 Million (Or More) Tax-Free, by Manoj Viswanathan (UC-Hastings)

September 29, 2019 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink | Comments (0)

Saturday, September 28, 2019

Kornhauser: American Voices In A Changing Democracy — Women, Lobbying, And Tax

Symposium: Law Schools In The 21st Century

Duquesne Law SchoolSymposium, Behind the Classroom: An Examination of Law Schools in the 21st Century, 57 Duq. L. Rev. 1-118 (2019):

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September 28, 2019 in Legal Ed Conferences, Legal Ed Scholarship, Legal Education, Scholarship | Permalink | Comments (0)

Friday, September 27, 2019

Weekly SSRN Tax Article Review And Roundup: Elkins Reviews Cooper's The State Death Tax Credit And The SALT Deduction

This week, David Elkins (Netanya) reviews Jeffrey A. Cooper (Quinnipiac), Red States, Blue States: Lessons from the State Death Tax Credit and the “SALT” Deduction, 73 Tax Law. __ (2020) (forthcoming).

Elkins (2018)One of the more politically contentious provisions of the 2017 Tax Cuts and Jobs Act is the capping of the deduction for state and local taxes (SALT) at $10,000 per married couple. Opponents of the change have argued that it was designed to punish those states that voted for Hillary Clinton in the 2016 presidential elections. In an attempt to reverse the legislation, the leaders of four of these states have sued the federal government. Proponents claim that the cap is necessary to prevent high-tax states from imposing the costs of their expensive programs on the federal government and, indirectly, on residents of low-tax states.

In a timely article, Professor Cooper places the issue in historical context by comparing the SALT deduction to the federal estate tax state death tax credit that was established in 1924 and repealed in 2001. He posits that viewing the 2017 legislation within the broader historical context reveals trends and patterns, providing greater insight than would a study of the SALT deduction in isolation. He considers not only the rhetoric surrounding the various legislative changes but also how states responded to the adoption and then to the repeat of the state death tax credit and examines whether such behavior might be a harbinger of state reaction to the SALT deduction cap.

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September 27, 2019 in David Elkins, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Zelenak Presents Women And The Politics Of The Early Federal Income Tax Changes Today At Boston College

Larry Zelenak (Duke) presents “We Will See That You Are Troubled Right Along”: Women and the Politics of the Early Federal Income Tax at Boston College today as part of its Tax Policy Workshop Series hosted by Jim Repetti, Diane Ring, and Shu-Yi Oei:

Zelenak (2016)This essay tells the stories of three women who, in the early years of the federal income tax, claimed significant roles in tax policy debates by focusing on the intersection of the income tax and policy issues in the female sphere. In chronological order of their contributions, they are: Helen M. Bent, who critiqued the treatment of married women in the bill that became the 1913 income tax; the leading suffragist Anna Howard Shaw, who shortly after enactment of the 1913 income tax urged passive resistance to the tax by unfranchised women; and attorney Martha Connole, who in 1927 explained to the Ways and Means Committee how the income tax rules were unfair to single women. Shaw was famous during her lifetime and remains well-known today, but neither Bent nor Connole was ever famous, and both are all but forgotten today.

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September 27, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Tax Presentations At Today's 20th Global Conference On Environmental Taxation

Tax presentations at today's 20th Global Conference on Environmental Taxation in Cyprus, Greece:

BannerMona Hymel (Arizona), Suffocation: Supported by the U.S. Federal Government:

Most of us have experienced riding an elevator with strangers. Many of us have experienced the slightly uncomfortable feeling as strangers continue entering the elevator until it is full or maybe even touching strangers as the elevator fills. People vary worldwide in the amount of private space they are accustomed to enjoying. In other words, how many people have to get onto the elevator with you before you feel physically uncomfortable? Assume that so many strangers crowd on to the elevator that, as clean air in the elevator runs out, they will all suffocate to death. The elevator story provides a simple picture of humanity’s ultimate demise. This article discusses the situation of the strangers; a growing population. The article explains the most serious contributors to the increasing number of strangers: (1) existing government pronatalist policies; (2) the ugly secrets of immigration; (3) artificial intelligence dramatically reduces the need for humans; and (4) the impacts of worldwide growth.

Like the elevator, the impact of population on Earth’s wellbeing is nothing more than a scientific equation – Carry Capacity. For an elevator, consider the size of the elevator; any life sustaining resources available; the number of people supported by the elevator; and its resources before they begin to suffocate or starve to death. Fortunately, Earth has abundant space and resources. But we know that space, resources, and the population are all in critical condition. Scientists estimate that the Earth’s carrying capacity is reaching its limits. Moreover, increasing immigration and the significant increase in sourcing jobs to AI could result in the overall carrying capacity of the earth to decline. Yet, the United States operates on a growth model that can no longer be sustained. “Growing the U.S. economy” must be replaced. As population continues to grow and resources decline (jobs taken by AI), carrying capacity must be adjusted to avoid world tragedy. The elevator is full!

By analyzing U.S. Federal tax policy, the article suggests changes and additional work to be done. For example, the U.S. tax law contains conflicting tax provisions both encouraging and discouraging population growth. This article discusses how population growth negatively impacts the environment; the U.S. policies on population as subsidized through the tax system; and alternative tax policies to mitigate U.S. population growth and repeal of existing pronatal policies.

Tracey M. Roberts, (Samford University), Stranded Assets and Competitive Pricing for Regulated Utilities: A Federal Tax Solution:

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September 27, 2019 in Conferences, Scholarship, Tax, Tax Conferences, Tax Scholarship | Permalink | Comments (1)