TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Monday, March 18, 2019

Law School Rankings By Attractiveness To Students (25/50/75 LSAT/UGPA, Transfers In/Out)

CJ Ryan (Roger Williams) & Brian L. Frye (Kentucky), The 2019 Revealed-Preferences Ranking of Law Schools:

In 2017, we published A Revealed-Preferences Ranking of Law Schools, which presented the first (intentionally) objective ranking of law schools. Other law school rankings are subjective because their purpose is to tell prospective law students where to matriculate. Our “revealed-preferences” ranking is objective because its purpose is to ask where prospective law students actually choose to matriculate. In other words, subjective rankings tell students what they should want, but our objective ranking reveals what students actually want. These rankings were originally based on an average of the previous five-years of LSAT and GPA quartile and median averages for law schools. We updated these rankings with a 2018 ranking that focused exclusively on the 75th, median, and 25th quartiles of each of these measures for the entering class in Fall 2017. We have modified our rankings yet again to evaluate law schools based not only on their success at matriculating the most desirable first year law students, but also on their success at retaining those students and attracting transfer students.

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March 18, 2019 in Law School Rankings, Legal Education, Scholarship | Permalink | Comments (0)

Lesson From The Tax Court: Form 2848 Does Not Change Your Address

Tax Court (2017)Generally, it’s nice to be noticed.  Tomorrow is my 24th wedding anniversary and I remain truly grateful that my wife noticed me one day long ago at a contra dance at Glen Echo.  That notice continues to this day, fully reciprocated. 

But sometimes it’s not so nice, such as when the notice comes from the IRS.  And when Congress wants the IRS to “notice” taxpayers (pun intended), it generally requires the IRS to send that notice to their last known address. 

The last known address rule is critical to learn.  Congress puts that rule in about 20 different statutes, helpfully listed in Rev. Proc. 2010-16.  The governing regulation generally allows the IRS to comply with the rule by using the address in its Master File database.  There are some exceptions.  In a blog last November, I discussed one exception: certain events can trigger an IRS duty of due diligence to go beyond the address in its database. 

Last week the Tax Court taught us about another exception in Damian K. Gregory and Shayla A. Gregory v. Commissioner, 152 T.C. No. 7 (Mar. 13, 2019) (Judge Buch).  There, Tax Court let us know, in a fully reviewed opinion, that a Power of Attorney (Form 2848) does not have the legal effect of telling the IRS that a taxpayer has changed their official address of record.  This is important because, as long-time practitioners know, Form 2848 used to work for that purpose (albeit as a backstop).  Time to unlearn that old lesson!  Details below the fold.

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March 18, 2019 in Bryan Camp, New Cases, Scholarship, Tax Practice And Procedure | Permalink | Comments (5)

Sunday, March 17, 2019

Can Christian Conservatives Transform Law Through Legal Education?

ALRJoshua C. Wilson (Denver) & Amanda Hollis‐Brusky (Pomona), Higher Law: Can Christian Conservatives Transform Law Through Legal Education?, 52 Law & Soc'y Rev. 835 (2018) (more here):

The allure of law schools as transformative institutions in the United States prompted Christian Right leaders to invest in legal education in the 1990s and early 2000s. The aspiration was to control the training of lawyers in order to challenge the secular legal monopoly on law, policy, and culture. In this article, we examine three leading Christian conservative law schools [Ave Maria, Liberty, Regent] and one training program [Blackstone] dedicated to transforming the law. We ask how each institution seeks to realize its transformative mission and analyze how they organize themselves to produce the kinds of capital (human, intellectual, social, cultural) needed to effectively change the law. To do so, we develop a typology of legal institution‐building strategies (infiltration, supplemental, and parallel alternative) to compare the relative advantages and disadvantages of institutional forms.

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March 17, 2019 in Legal Education, Scholarship | Permalink | Comments (0)

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 #5:

  1. [502 Downloads]  Ten Reasons to Prefer Tax Partnerships Over S-Corporations, by Bradley Borden (Brooklyn)
  2. [338 Downloads]  A Constitutional Wealth Tax, by Ari Glogower (Ohio State)
  3. [186 Downloads]  Basis of Grantor Trust Assets Before the Grantor's Death, by Jeffrey Pennell (Emory)
  4. [169 Downloads]  Tax Wars: The Battle over Taxing Global Digital Commerce, by Art Cockfied (Queen's)
  5. [138 Downloads]  The Marriage of Artificial Intelligence and Tax Law: Past, Present, and Future, by Blazej Kuzniacki (Ministry of Finance, Poland)

March 17, 2019 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, March 16, 2019

Apollo 13 And The Importance Of Time-Pressured Performance Tests In Preparing Law Students For The Bar Exam (And Practice)

Apollo 13 3Kathleen Elliott Vinson (Suffolk) & Sabrina DeFabritiis (Suffolk), Under Pressure: How Incorporating Time-Pressured Performance Tests Prepares Students for the Bar Exam and Practice, 122 W. Va. L. Rev. ___ (2019):

“Houston, we have a problem.” In 1970, an explosion on board the Apollo 13 spacecraft’s flight to the moon damaged the air filtration system, causing carbon monoxide to build up in the cabin. The astronauts on board would be dead in mere hours if the system could not be fixed or replaced. NASA’s Mission Control in Houston, Texas called for engineers, scientists, and technicians to work with a set of materials identical to those on the spacecraft to build a filtration system under extreme time pressure. The result may have been ugly, inelegant, and far from perfect, but it saved the astronauts’ life. The Apollo 13 situation may be a dramatic example of problem solving, creativity, and completing a task under extreme time pressure with life or death consequences; however, lawyers also work in stressful environments, under time pressure, while juggling multiple tasks involving life, liberty, or millions of dollars. How do recent law school graduates perform when facing a time-sensitive task when the stakes are high, when they are accustomed from law school of having several weeks or more, with feedback along the way, to complete that type of assignment?

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March 16, 2019 in Legal Education, Scholarship | Permalink | Comments (2)

Friday, March 15, 2019

Weekly SSRN Tax Article Review And Roundup: Elkins Reviews Fleischer, Hemel & Leff On A Universal Basic Income

This week, David Elkins (Netanya) reviews new works by Miranda Perry Fleischer (San Diego) & Daniel Hemel (Chicago), The Architecture of Basic Income, 86 U. Chi. L. Rev. ___ (2019) and Benjamin M. Leff (American), EITC for All: A Universal Basic Income Compromise Proposal, 25 Wash. & Lee J. Rts. & Soc. Just. __ (2019):

Elkins (2018)This week saw the posting of two articles discussing the concept of universal basic income (“UBI”). It is interesting to compare and contrast two proposals for what is likely to be a focus of academic and political attention in the near future.

At the most fundamental level, the two articles take different tacks by their choice of how conceptually to integrate UBI into the current tax framework. Fleischer and Hemel compare UBI to a negative income tax. They demonstrate it that the difference between them is merely one of framing: a UBI financed by a progressive income is functionally equivalent to a negative income tax. One significant difference is that the negative income tax – like the positive income tax – is calculated on the family level, whereas UBI is calculated on the individual level. Fleischer and Hemel argue that a cash grant to each citizen and lawful permanent resident, regardless of age, would better serve the goals of reducing poverty that would a payment to families.

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March 15, 2019 in David Elkins, Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Yin Presents Stanley Surrey And The Tax Legislative Process Today At Boston College

Yin (2015)George Yin (Virginia) presents Who Speaks for Tax Equity and Tax Fairness: Stanley Surrey and the Tax Legislative Process at Boston College today as part of its Tax Policy Workshop Series hosted by Jim Repetti, Diane Ring, and Shu-Yi Oei:

This article examines and assesses Stanley Surrey’s view of the federal tax legislative process. One of the most influential tax professionals of the twentieth century, Surrey is likely best known for his advocacy of specific tax policy ideas. But Surrey saw legislation as the prime route for adoption of most of his ideas, and he thus focused and provided many commentaries on the tax legislative process. He drew on extensive experience with the process, serving two lengthy terms (almost 20 years) in the Treasury Department, and remaining closely involved with it throughout his academic years.

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

Fox & Goldin: Sharp Lines And Sliding Scales In Tax Law

Edward G. Fox (Michigan) & Jacob Goldin (Stanford), Sharp Lines and Sliding Scales in Tax Law:

The law is full of sharp lines, where small changes in one’s circumstances lead to significant changes in legal treatment. In many cases, a sharp line can be smoothed out by replacing it with a sliding scale. Under a sliding scale, small changes in one’s circumstances lead to small changes in legal treatment. In this paper, we study the policy choice between sharp lines and sliding scales in tax law, focusing particularly on concerns related to efficiency, complexity, and administration. Sharp lines are dominant in tax law, especially for classifications that depend on factors other income. We argue that this dominance is unwarranted; sliding scales are often feasible in practice and better serve a variety of tax policy goals. We illustrate our claims with examples drawn from diverse areas of tax law.

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

Policy Implications Of Opportunity Zones

Rebecca Lester, Cody Evans & Hanna Tian (Stanford), Opportunity Zones: An Analysis of the Policy's Implications, 90 State Tax Notes (Oct. 15, 2018):

This article summarizes the Opportunity Zone incentive in the Tax Cuts and Jobs Act by providing descriptive statistics on the selected zones, outlining considerations for investors, and using data on the New Markets Tax Credit to inform expectations of investors' responses to this policy.

March 15, 2019 in Scholarship, Tax | Permalink | Comments (1)

Thursday, March 14, 2019

Holderness Presents Navigating 21st Century Tax Jurisdiction Today At Temple

Holderness (2017)Hayes Holderness (Richmond) presents Navigating 21st Century Tax Jurisdiction at Temple today as part of its Faculty Colloquium Series:

Hailed as a massive victory for the states, the Supreme Court’s 2018 decision in South Dakota v. Wayfair brought dated state tax jurisdiction standards into the twenty-first century, freeing the states to tax internet vendors. However, the decision left the larger state tax jurisdiction doctrine undertheorized and at a crossroads: should the doctrine concern itself only with notice and fairness issues akin to those found in the due process personal jurisdiction realm, or should it also concern itself with protecting interstate commerce from undue state tax burdens?

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

Mayer: The Promises And Perils Of Using Big Data To Regulate Nonprofits

Lloyd Hitoshi Mayer (Notre Dame), The Promises and Perils of Using Big Data to Regulate Nonprofits:

For the optimist, government use of “Big Data” involves the careful collection of information from numerous sources and expert analysis of those data to reveal previously undiscovered patterns and so revolutionize the regulation of criminal behavior, education, health care, and many other areas. For the pessimist, such use involves the haphazard seizure of information to generate massive databases that render privacy an illusion and result in arbitrary and discriminatory computer-generated decisions. The reality is of course more complicated, with government use of Big Data presenting on one hand the promises of greater efficiency, effectiveness, and transparency, and on the other hand the perils of inaccurate conclusions, invasion of privacy, unintended discrimination, increased government power, and violations of other legal limits on government action.

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

Wednesday, March 13, 2019

Grewal Presents The President's Tax Returns Today At UCLA

Grewal (2019)Andy Grewal (Iowa) presents The President's Tax Returns at UCLA today as part of its Colloquium on Tax Policy and Public Finance hosted by Jason Oh:

For around 40 years, U.S. Presidents and major-party Presidential candidates have publicly released their personal income tax returns. However, during the last election cycle, candidate Donald Trump broke from this recent tradition and did not disclose them. This nondisclosure ultimately did not imperil his candidacy, and he became the 45th President of the United States.

But calls for the President’s tax returns have continued. Many Democratic legislators believe that the President’s tax returns could contain important information related to his apparent conflicts of interest and his foreign connections. However, for the last two years, the Republican-controlled Senate and House of Representatives declined to pursue those returns.

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March 13, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (2)

Mehrotra Presents T.S. Adams And The Beginning Of The Value-Added Tax Today At Toronto

Mehrotra (2017)Ajay Mehotra (American Bar Foundation; Northwestern) presents Economic Expertise, Democratic Constraints, and the Historical Irony of U.S. Tax Policy: Thomas S. Adams and the Beginnings of the Value-Added Tax at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:

When one examines how modern nation-states generate public revenue, the United States quickly emerges as a striking outlier compared to other advanced industrialized countries. Even a cursory review of statistics from the Organization for Economic Cooperation and Development (OECD) shows that the United States is out of step with the rest of the developed world in the amount, and the way, it raises tax revenue. One reason for this apparent American tax exceptionalism is the absence of a U.S. national consumption tax. Whereas nearly all other OECD countries have a national consumption tax, frequently in the form of a value-added tax (VAT), the United States remains one of the few countries without a consumption tax at the federal level. This project explores how and why the United States has historically rejected national consumption taxes.

Nearly all developed countries, and many in the developing world, have some type of a national consumption tax, frequently in the form of a value-added tax (VAT). The United States is an exception. This project focuses on the fundamental question: why no VAT in the United States? To address this overall research question, this project explores three key historical periods.

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March 13, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Afield: Social Justice And The Low-Income Taxpayer

W. Edward Afield (Georgia State), Social Justice and the Low-Income Taxpayer, 64 Vill. L. Rev. ___ (2019):

Tax justice is social justice. To those regularly working to resolve tax controversies for low-income taxpayers and who are often dealing with the financial implications of life and death issues like human trafficking, the ability to afford medical care, and the risks of financial despair leading to suicide, this is an uncontroversial statement. To those for whom “tax attorney” is often the punchline to their favorite lawyer joke, however, this statement appears not to fit in with traditional conceptions of social justice. This is particularly true when social justice is defined as requiring not just improved access to representation in any type of legal matter but also as requiring specific societal outcomes that reduce poverty, improve housing access, combat racial discrimination, reduce hunger, and improve healthcare access. At first blush to those outside the tax bar who do not appreciate that most of these issues are inextricably linked to the tax system, tax justice does not appear to do any of these things. Accordingly, tax issues are often overlooked in the conversation about improving social justice.

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March 13, 2019 in Scholarship, Tax | Permalink | Comments (1)

Tuesday, March 12, 2019

Homonoff Presents Program Recertification Costs: Evidence From SNAP Today At NYU

HomonoffTatiana Homonoff (NYU) presents Program Recertification Costs: Evidence from SNAP at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

We document low rates of recertification for the Supplemental Nutritional Assistance Program (SNAP) which we attribute to procedural issues associated with the recertification process. We find that current recipients — who must complete a recertification interview by the end of their recertification month — are 19 percent less likely to recertify when assigned an interview date at the end rather than at the beginning of the month. The results persist when conditioning on eligibility and are larger for long-term recipients and households with children, suggesting hassle costs associated with later interview dates worsen targeting efficiency both in terms of eligibility and need.

Conclusion. In this paper, we demonstrate that administrative burden associated with the SNAP recertification process leads to significantly lower rates of recertification success. Cases that are randomly assigned to initial interview dates at the beginning of the recertification month are 19 percent more likely to recertify than cases assigned to interviews at the end of the month. Our estimates are unchanged when conditioning on likely eligibility for the program. Such large differences in recertification success are particularly surprising given the ease with which cases may reschedule their assigned date. We find that the vast majority of the cases who fail recertification as a result of interview assignment successfully reapply for the program within the 90 days post-recertification, though we also find a small but significant effect of interview assignment on the likelihood of remaining off the program for over 90 days despite maintained eligibility. Additionally, the decrease in administrative costs associated with cases that churn more than offset the increase in costs of increased benefit distribution for these cases. While current federal law requires that SNAP recipients must complete a caseworker interview to recertify, the scheduling and timing of these interviews is at the discretion of the counties meaning that our suggested policy could be implemented without a waiver or a regulation change.

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March 12, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Morse Reviews Sugin's The Social Meaning Of The Tax Cuts And Jobs Act

Jotwell (Tax) (2016)Susan Morse (Texas), Morality and the 2017 Tax Act (JOTWELL) (reviewing Linda Sugin (Fordham), The Social Meaning of the Tax Cuts and Jobs Act, 128 Yale L.J. Forum (Oct. 25, 2018)):

I am on alert for tax law changes as I teach Federal Income Tax this semester for the first time since the passage of the 2017 tax act. They seem to appear out of nowhere, rather than as part of a predictable pattern. What can explain seemingly disconnected provisions, scattered throughout the Code and enacted without an explicit policy explanation?

Linda Sugin takes on this question in The Social Meaning of the Tax Cuts and Jobs Act, published in 2018 at the Yale Law Journal Forum. Her critical perspective makes an effort to divine the worldview embedded in the TCJA based on the content of the enacted law. Sugin’s engineering effort shows the following “American priorities and values revealed by the TCJA:

  1. The traditional family is best;
  2. Individuals have greater entitlement to their capital than to their labor;
  3. People are autonomous individuals;
  4. Charity is for the rich; and
  5. Physical things are important.”

Sugin reviews dozens of provisions to support her arguments. ...

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March 12, 2019 in Scholarship, Tax | Permalink | Comments (1)

Monday, March 11, 2019

Clausing Presents The Progressive Case For Free Trade, Immigration, And Global Capital Today At NYU

OpenKimberly Clausing (Reed College) presents Open: he Progressive Case for Free Trade, Immigration, and Global Capital (Harvard University Press 2019) today at NYUTimothy Noah (Politico) is the moderator and Dan Shaviro (NYU) is the commentator.

With the winds of trade war blowing as they have not done in decades, and Left and Right flirting with protectionism, a leading economist forcefully shows how a free and open economy is still the best way to advance the interests of working Americans.

Globalization has a bad name. Critics on the left have long attacked it for exploiting the poor and undermining labor. Today, the Right challenges globalization for tilting the field against advanced economies. Kimberly Clausing faces down the critics from both sides, demonstrating in this vivid and compelling account that open economies are a force for good, not least in helping the most vulnerable.

A leading authority on corporate taxation and an advocate of a more equal economy, Clausing agrees that Americans, especially those with middle and lower incomes, face stark economic challenges. But these problems do not require us to retreat from the global economy. On the contrary, she shows, an open economy overwhelmingly helps. International trade makes countries richer, raises living standards, benefits consumers, and brings nations together. Global capital mobility helps both borrowers and lenders. International business improves efficiency and fosters innovation. And immigration remains one of America’s greatest strengths, as newcomers play an essential role in economic growth, innovation, and entrepreneurship. Closing the door to the benefits of an open economy would cause untold damage. Instead, Clausing outlines a progressive agenda to manage globalization more effectively, presenting strategies to equip workers for a modern economy, improve tax policy, and establish a better partnership between labor and the business community.

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March 11, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Lesson From The Tax Court: Murphy’s Law Of Mailing

Tax Court (2017)When something goes right most of the time, we generally are not prepared for when it goes wrong.  Last week’s opinion in Teri Jordan v. Commissioner, T.C. Memo. 2019-15 (Mar. 4, 2019) (Judge Buch) teaches that lesson as applied to the §7502 statutory mailbox rule.  It also teaches us what we need to know to avoid the unhappy outcome for Ms. Jordan.

Most folks know something about the statutory mailbox rule in §7502.  Or at least think they do.  Almost everyone has a general idea if they mail their tax returns or, as here, their Tax Court petition on the last day of the deadline for filing, all will be well.  That generally works out for them because the U.S. mail is reliable.  That reliability leads many folks to think they can print off a stamp or postage label from an internet provider and drop the petition off at their nearest U.S. Post Office (USPS).  Or taking it to the counter of a Fed Ex or UPS “store” is the same as taking it to a USPS counter.  Again, those actions usually result in a timely petition. 

More savvy (or cautious) taxpayers, however, not only know the mailbox rule, they also know Murphy’s law.  They know the best way to beat Murphy’s law of mailing is to use Registered Mail or Certified Mail.  Ms. Jordan was not one of the savvy.  She  used a private postage label printed out from Endicia.com to mail her Tax Court petition.  That proved to be a mistake.  To see how her case is a lesson for all of us, read on.

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March 11, 2019 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure | Permalink | Comments (7)

Sunday, March 10, 2019

Providing Online Access To Everyone's Tax Returns Makes A Nation Happier

Ricardo Perez-Truglia (UCLA), The Effects of Income Transparency on Well-Being: Evidence from a Natural Experiment (NBER Mar. 6, 2019):

In 2001, Norwegian tax records became easily accessible online, allowing everyone in the country to observe the incomes of everyone else. According to the income comparisons model, this change in transparency can widen the gap in well-being between richer and poorer individuals. We test this hypothesis using survey data from 1985–2013. Using multiple identification strategies, we show that the higher transparency increased the gap in happiness between richer and poorer individuals by 29%, and it increased the life satisfaction gap by 21%. We provide suggestive evidence that some, although probably not all, of this effect relates to changes in self-perceptions of relative income. We provide back-of-the-envelope estimates of the importance of income comparisons, and discuss implications for the ongoing debate on transparency policies.

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

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 #5:

  1. [489 Downloads]  Ten Reasons to Prefer Tax Partnerships Over S-Corporations, by Bradley Borden (Brooklyn)
  2. [345 Downloads]  The Proposed Section 163(j) Regulations, by David Miller, Sejin Park, Mani Kakkar & Sean Webb (Proskauer)
  3. [316 Downloads]  A Constitutional Wealth Tax, by Ari Glogower (Ohio State)
  4. [181 Downloads]  Basis of Grantor Trust Assets Before the Grantor's Death, by Jeffrey Pennell (Emory)
  5. [152 Downloads]  Tax Wars: The Battle over Taxing Global Digital Commerce, by Art Cockfied (Queen's)

March 10, 2019 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, March 9, 2019

How Law Schools Are Like Comcast And Charter Spectrum: They Persist In Bundling Legal Education In A World That Demands Unbundling

CableMegan M. Carpenter (Dean, New Hampshire), Legal Education Unbundled (and Rebundled), 50 U. Tol. L. Rev. 265 (2019):

Abstract: This essay calls for an unbundling of legal education, much like the kind of unbundling we have seen in the cable, music, and print news media. It suggests that the standard legal education “bundle” — the generalized JD — is just one of many forms of legal education that can be packaged appropriately for today’s legal education market needs.

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March 9, 2019 in Legal Education, Scholarship | Permalink | Comments (2)

Friday, March 8, 2019

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

Michelle D. Layser (Illinois), The Pro-Gentrification Origins of Place-Based Investment Tax Incentives and a Path Toward Community Oriented Reform, 2019 Wis. L. Rev. ___:

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

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

Thursday, March 7, 2019

Osofsky Presents Beyond Notice-And-Comment: The Making Of The § 199A Regs Today At Duke

Osofsky (2019)Leigh Osofsky (North Carolina) presents Legislation and Comment: The Making of the Section 199A Regulations (with Shu-Yi Oei (Boston College) )at Duke today as part of its Tax Policy Workshop Series hosted by Lawrence Zelenak:

Congress passes a highly transformative but hastily drafted legal reform. Who comments in the regulatory process, when, and what are the implications? In this Article, we study these questions by examining how the regulatory process has unfolded in the case of § 199A, one of the central provisions from the monumental 2017 tax reform.

We document the comments that went into making the § 199A regulations from the time of legislative enactment through the hearing on the proposed regulations. We show that many comments were made before the proposed regulations were issued and the official administrative law notice-and-comment period had even opened. We examine how Treasury explicitly considered these comments in the proposed regulations. And we explore how these comments and other engagements—which were not wholly transparent to the public—shaped the proposed regulations and the subsequent conversation in the actual notice-and-comment period. We also investigate the role of indirect public dialogue and comments received after the official close of the notice-and-comment period.

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

Morse Presents Government-To-Robot Enforcement At Utah

Morse (2018)Susan Morse (Texas) presents Government-to-Robot Enforcement, 2019 U. Ill. L. Rev. ___ (reviewed by Orly Mazur (SMU) here), at Utah yesterday as part of its Howard H. Rolapp Distinguished Visiting Scholar program:

Automated legal systems occupy a central place in the administration of most regulatory regimes. Examples include TurboTax, wage and hour software, and self-driving cars. These systems produce results which invite examination and adjudication on a centralized, ex post basis. This is revolutionary. It means that the content of law, which technically applies to individual regulated parties, is determined centrally by interactions between the government and firms that make automated legal systems. I call this trend government-to-robot enforcement.

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

Bitcoin: The New Swiss Banks

Jason Clark & Margaret Ryznar (Indiana-Indianapolis), Bitcoin: The New Swiss Banks, 2019 U. Ill. L. Rev. Online ___ :

Bitcoin has captivated much attention and imagination since its emergence in 2009, but not enough when it comes to its tax implications. As a result, there are several areas in need of attention when it comes to the federal tax treatment of virtual currency. The right guidance in these areas would strengthen the legitimate use of virtual currency and maximize the chances for tax compliance.

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

Wednesday, March 6, 2019

Blouin Presents The Location, Composition, And Investment Implications Of Permanently Reinvested Earnings Today At UCLA

Blouin (2018)Jennifer Blouin (Wharton School, University of Pennsylvania) presents The Location, Composition, and Investment Implications of Permanently Reinvested Earnings (with Linda Krull (Oregon) & Leslie Robinson (Dartmouth) at UCLA today as part of its Colloquium on Tax Policy and Public Finance hosted by Jason Oh:

This study estimates the location, composition, and investment implications of permanently reinvested earnings (PRE) reported in U.S. multinational corporations’ (MNCs) consolidated financial statements. Our first set of analyses suggest that firms’ PRE designations are motivated by both financial reporting incentives (i.e., tax expense deferral) and investment opportunities. Our second set of analyses find that domestic investment by MNCs with PRE is less responsive to domestic investment opportunities and more sensitive to domestic cash flow than firms without PRE, consistent with PRE indicating internal capital market frictions. We conclude that financial statement users could benefit from enhanced disclosures about foreign operations.

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March 6, 2019 in Colloquia, Scholarship | Permalink | Comments (0)

Fourth International Conference On Taxpayer Rights

Taxpayer Rights 2The National Taxpayer Advocate is convening the fourth International Conference on Taxpayer Rights (agenda) on May 23-24, 2019 at Minnesota:

The conference brings together government officials, scholars, and practitioners from around the world to explore how global taxpayer rights serve as the foundation for effective tax administration. For two days, speakers, panelists and attendees will explore the role of taxpayer rights in the digital age, and the implications of the expanding digital environment for transparency, certainty, and privacy in tax administration.

Panel discussions will focus on the following and more:

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March 6, 2019 in Conferences, IRS News, Scholarship, Tax | Permalink | Comments (0)

Fleischer & Hemel: The Architecture Of A Basic Income

Miranda Perry Fleischer (San Diego) & Daniel Jacob Hemel (Chicago), The Architecture of a Basic Income, 86 U. Chi. L. Rev. ___ (2019):

The notion of a universal basic income (“UBI”) has captivated academics, entrepreneurs, policymakers, and ordinary citizens in recent months. Pilot studies of a UBI are underway or in the works on three continents. And prominent voices from across the ideological spectrum have expressed support for a UBI or one of its variants, including libertarian Charles Murray, Facebook co-founder Chris Hughes, labor leader Andy Stern, and—most recently—former President Barack Obama. Although even the most optimistic advocates for a UBI will acknowledge that nationwide implementation lies years away, the design of a basic income will require sustained scholarly attention. This article seeks to advance the conversation among academics and policymakers about UBI implementation.

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

Tuesday, March 5, 2019

Hillier & Waerzeggers Present The Platform For Tax Collaboration: Offshore Indirect Transfers Today At Georgetown

IMF LogoChristophe Waerzeggers (IMF) & Cory Hillier (IMF) present The Platform for Collaboration on Tax: The Taxation of Offshore Indirect Transfers—A Toolkit at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by John Brooks and Lilian Faulhaber:

The tax treatment of ‘offshore indirect transfers’ (OITs)—in essence, the sale of an entity owning an asset located in one country by a resident of another—has emerged as a significant issue in many developing countries. It has been identified in IMF technical assistance work and scoping by the OECD, but was not covered by the G20-OECD project on Base Erosion and Profit Shifting (BEPS). In relation to the extractive industries, OITs are also the subject of work at the UN.

The country in which the underlying asset is located may wish to tax gains realized on such transfers—as is currently the case for direct transfers of immovable assets. Such treatment might reasonably be applied to a wider class of assets, to include more those generating location specific rents—returns that exceed the minimum required by investors and which are not available in other jurisdictions. This might include, for instance, telecom licenses and other rights issued by government. The report also recognizes, however, that gains on OITs may be attributable in part to value added by the owners and managers of such assets, and that some countries may choose not to tax gains on OITs.

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March 5, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Reinhold Presents Does The Section 107 Parsonage Allowance Violate The Establishment Clause? Today At NYU

ReinholdRichard Reinhold (Chair, Tax Department, Willkie Farr & Gallagher, New York) presents Does the Parsonage Exemption in Internal Revenue Code Section 107 Violate the Establishment Clause of the 1st Amendment? at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

Internal Revenue Code sec. 107(1) has long exempted from inclusion in income the rental value of a minister's church-provided home, or “parsonage” (with parallel relief being available as regards all religious denominations). A later amendment confirms availability of the exemption for amounts paid to defray ministers' costs for separately-acquired housing. See IRC sec. 107(2). Last year, a District Court in Wisconsin held the exemption for reimbursed parsonage allowances to represent a violation of the Establishment Clause of the 1st Amendment of the U.S. Constitution ("Congress shall make no law respecting an establishment of religion . . ."). Gaylor v. Mnuchin, 278 F. Supp. 3d 1081 (D.WI 2017). The case was appealed to the Seventh Circuit Court of Appeals and that court's decision is expected imminently.

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March 5, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Fordham Symposium: Legal Education In Twentieth-Century America

Fordham Logo (2019)Symposium, Legal Education in Twentieth-Century America, 87 Fordham L. Rev. 859-1031 (2018):

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March 5, 2019 in Legal Education, Scholarship | Permalink | Comments (1)

Clausing: Open — The Progressive Case For Free Trade, Immigration, And Global Capital

OpenKimberly Clausing (Reed College), The Progressive Case for Free Trade, Immigration, and Global Capital (Harvard University Press 2019):

With the winds of trade war blowing as they have not done in decades, and Left and Right flirting with protectionism, a leading economist forcefully shows how a free and open economy is still the best way to advance the interests of working Americans.

Globalization has a bad name. Critics on the left have long attacked it for exploiting the poor and undermining labor. Today, the Right challenges globalization for tilting the field against advanced economies. Kimberly Clausing faces down the critics from both sides, demonstrating in this vivid and compelling account that open economies are a force for good, not least in helping the most vulnerable.

A leading authority on corporate taxation and an advocate of a more equal economy, Clausing agrees that Americans, especially those with middle and lower incomes, face stark economic challenges. But these problems do not require us to retreat from the global economy. On the contrary, she shows, an open economy overwhelmingly helps. International trade makes countries richer, raises living standards, benefits consumers, and brings nations together. Global capital mobility helps both borrowers and lenders. International business improves efficiency and fosters innovation. And immigration remains one of America’s greatest strengths, as newcomers play an essential role in economic growth, innovation, and entrepreneurship. Closing the door to the benefits of an open economy would cause untold damage. Instead, Clausing outlines a progressive agenda to manage globalization more effectively, presenting strategies to equip workers for a modern economy, improve tax policy, and establish a better partnership between labor and the business community.

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March 5, 2019 in Book Club, Scholarship, Tax | Permalink | Comments (1)

Monday, March 4, 2019

Shobe Presents Economic Segregation, Tax Reform, And The Local Tax Deduction Today At Pepperdine

Shobe (2018)Gladriel Shobe (BYU) presents Economic Segregation, Tax Reform, and the Local Tax Deduction at Pepperdine today as part of our Tax Policy Workshop Series hosted by Dorothy Brown and Paul Caron and funded in part by a generous gift from Scott Racine:

Economic segregation has increased over the past half century. The trend of rich localities getting richer while poor localities get poorer is particularly concerning because it limits upward mobility and perpetuates intergenerational income inequality. This Article makes the novel argument that the federal deduction for local taxes rewards, and likely contributes to, economic segregation. It arrives at that conclusion by showing that the local tax deduction disproportionately subsidizes wealthy localities because only those localities have a critical mass of wealthy taxpayers who claim the deduction. This allows wealthy localities, but not poor localities, to provide services at a cost less than face value to their residents. This Article argues that the deduction’s subsidy for wealthy localities rewards and likely contributes to economic segregation because it provides an incentive for the wealthy to segregate into wealthy, subsidized localities over less segregated and less subsidized localities.

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March 4, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Polsky: Explaining Choice-Of-Entity Decisions By Silicon Valley Start-Ups

Gregg D. Polsky (Georgia),  Explaining Choice-of-Entity Decisions by Silicon Valley Start-Ups:

Perhaps the most fundamental role of a business tax advisor is to recommend the optimal entity choice for nascent business enterprises. Nevertheless, even in 2018, the choice-of-entity analysis remains highly muddled. Most tax practitioners across the United States consistently recommend flow-through entities, such as LLCs and S corporations, to their clients. In contrast, a discrete group of highly sophisticated tax professionals, those who advise start-ups in Silicon Valley and other hotbeds of start-up activity, prefer C corporations.

Prior commentary has described and tried to explain this paradox without finding an adequate explanation. These commentators have noted a host of superficially plausible explanations, all of which they ultimately conclude are not wholly persuasive. The puzzle therefore remains.

This article attempts to finally solve the puzzle by examining two factors that have been either vastly underappreciated or completely ignored in the existing literature.

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

Lesson From The Tax Court: No Human Review Needed For Automated Penalties?

Tax Court (2017)Section 6751(b)(1) prohibits the IRS from assessing any penalty against a taxpayer “unless the initial determination of such assessment is personally approved (in writing) by the immediate supervisor of the individual making such determination...”  The Tax Court will not sustain a penalty unless the IRS produces evidence that the required personal approval has taken place before the IRS first notifies the taxpayer (typically in either a 30-day letter or the NOD) about the penalty.  Section 6751(b)(2) provides an exception to the personal approval requirement for “any...penalty automatically calculated through electronic means.” 

Craig S. Walquist and Maria L. Walquist v. Commissioner, 152 T.C. No. 3 (Feb. 25, 2019) (Judge Lauber) was one of two reviewed opinions issued last week that gave the IRS important wins on the scope of §6751.  In Walquist the Automated Correspondence Exam (ACE) system hit the taxpayers with a §6662 substantial understatement penalty.  No IRS employee even knew about it until after the taxpayers petitioned Tax Court in response to the automated NOD.  Thus, there was no supervisory approval as required by §6751(b)(1).  The Court decided, however, that the IRS was entitled to the §6751(b)(2) automatic computation exception to the supervisory approval requirement. 

At one level, this was an easy case against two unsympathetic taxpayer hobbyists.  At another level, however, the decision may create problems down the road because the facts of the case are more modest than the scope of the Court’s language.  That tension between facts and language may end up harming other taxpayers ensnared by the IRS automated processes.  As usual, you will find the more complete story below the fold.

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

The New Normal In The Job Market For New Lawyers

Bernard A. Burk (formerly North Carolina), The New Normal Ten Years In: The Job Market For New Lawyers Today And What It Means For The Legal Academy Tomorrow, 12 Fla. Int’l L. Rev.___ (2019):

Despite record-low general unemployment and a strong economy, the graduating law-school Class of 2017 entered a much smaller and more constrained labor market than existed ten years before. Overall, the number of entry-level, strongly law-related jobs (“Law Jobs”) that the Class of 2017 obtained was 26% lower than the Class of 2007, and remains at levels not seen since the early 1990s. The only reason that greater proportions of the graduating class are obtaining Law Jobs than in recent years is the dramatic decrease in the number of students attending law school since 2010.

Burk

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March 4, 2019 in Legal Education, Scholarship | Permalink | Comments (4)

Sunday, March 3, 2019

Lederman: The Fraud Triangle And Tax Evasion

Leandra Lederman (Indiana), The Fraud Triangle and Tax Evasion:

The “fraud triangle” is the preeminent framework for analyzing fraud in the accounting literature. It is a theory of why some people commit fraud, developed out of studies of individuals, including inmates convicted of criminal trust violations. The three components of the fraud triangle are generally considered to be (1) an incentive or pressure (usually financial), (2) opportunity, and (3) rationalization.

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March 3, 2019 in Scholarship | Permalink | Comments (1)

The Top Five New Tax Papers

SSRN Logo (2018)There is quite a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new #1 paper and a new paper debuting on the list at #5:

  1. [469 Downloads]  Ten Reasons to Prefer Tax Partnerships Over S-Corporations, by Bradley Borden (Brooklyn)
  2. [358 Downloads]  The Impact of Soda Taxes: Pass-through, Tax Avoidance, and Nutritional Effects, by Stephen Seiler (Stanford), Anna Tuchman (Northwestern) & Song Yao (Minnesota)
  3. [328 Downloads]  The Proposed Section 163(j) Regulations, by David Miller, Sejin Park, Mani Kakkar & Sean Webb (Proskauer)
  4. [305 Downloads]  A Constitutional Wealth Tax, by Ari Glogower (Ohio State)
  5. [160 Downloads]  Basis of Grantor Trust Assets Before the Grantor's Death, by Jeffrey Pennell (Emory)

March 3, 2019 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, March 2, 2019

How The Netherlands Became A Tax Haven For Multinationals

Jan Vleggeert & Henk Vording (Leiden), How The Netherlands Became a Tax Haven for Multinationals:

The Netherlands tax environment for multinational foreign directive investment (FDI) has been characterized as ‘a tax haven’ or, perhaps more accurately, as a ‘conduit financial centre’. Anyway, with a share of 25% in the worldwide market for tax-driven FDI diversion, the Dutch tax planning industry has become a prominent target of recent OECD and EU anti-avoidance measures. Adaptations in many of the relevant Dutch tax rules are by now under way.

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March 2, 2019 in Scholarship, Tax | Permalink | Comments (2)

Friday, March 1, 2019

Weekly SSRN Tax Article Review And Roundup: Speck Reviews Pratt's Tax Deductions for Fertility Treatment Costs

This week, Sloan Speck (Colorado) reviews a new work by Katherine Pratt (Loyola—LA), The Curious State of Tax Deductions for Fertility Treatment Costs, 28 S. Cal. Rev. L. & Soc. Just. ___ (2019).

Speck (2017)In The Curious Case of Tax Deductions for Fertility Treatment Costs, Katie Pratt elaborates the patchwork and unsatisfying treatment of assisted reproductive technologies (ARTs) under the current law governing deductions for medical expenses under § 213. Specifically, Pratt details recent court decisions in Magdalin, Longino, and Morrissey that severely circumscribe the scope of “medical care”—and thus the deductibility of related expenses—in the ART context. To some extent, Pratt’s argument illustrates the complications that flow from enacting a C- statute, then subjecting it to a variety of D+ interpretations. Hard facts may make bad law, but, at least in Magdalin and Morrissey, the facts aren’t the primary problem. Pratt appropriately concludes by proposing reasonable amendments to the statutory definition of “medical care” that would recognize the current landscape with regard to ARTs.

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March 1, 2019 in Scholarship, Sloan Speck, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Call For Papers And Commentators: 22nd Annual Critical Tax Conference At Pepperdine (April 6-7, 2019)

Pepperdine (2019)Pepperdine is delighted to host the 22nd Annual Critical Tax Conference on April 6-7, 2019:

The Critical Tax Theory Conference has a long history of fostering the work of both established and emerging scholars whose research challenges and enriches the tax law and policy literature. Critical tax scholars question assumptions of objectivity in tax, as their work explores how tax law and policy impact historically marginalized groups. At a time when tax policy is once again at the forefront of politics and public discourse, the work of these and other critical tax scholars supports a more robust discussion of the role for tax law in current and future social and economic policy.

Our keynote speakers are:

  • Dorothy Brown (Emory)
  • Ed Kleinbard (USC)

As at past Critical Tax Conferences, the 2019 conference will feature two types of sessions: (1) work-in-progress presentations, and (2) informal "incubator" sessions at which a participant will speak briefly about a paper idea and solicit suggestions. Both types of sessions are meant to be informal, friendly environments in which participants can share their ideas and receive constructive feedback. You need not present a paper of your own. Historically, every attendee has either presented a paper, offered ideas about a nascent project at an “incubator” session, or commented on another presenter’s work.

If you would like to attend, please RSVP here by March 5.

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March 1, 2019 in Conferences, Legal Education, Scholarship, Tax | Permalink | Comments (1)

2018 IFA International Tax Student Writing Award; Call For Entrants In 2019 Competition

IFA Logo (2015)The winner of the International Fiscal Association's 2018 International Tax Student Writing Competition is Ivan Ozawa Ozai (McGill), Tax Competition and the Ethics of Burden Sharing, 42 Fordham Int'l J. 61 (2018). 
Faculty Sponsor:  Allison Christians

2020 IFA International Tax Student Writing Competition:
Subject: Any topic relating to U.S. taxation of income from international activities, including taxation under U.S. tax treaties.
Open to: All students during the 2018-19 academic year (including independent study and summer 2018 school courses) pursuing a graduate degree (J.D., L.L.M., S.J.D., M.S.T., MTA, Masters of Taxation, or similar program). Any appropriate papers written in fall 2018 or spring and summer 2019.
Publication: The winning author will be entitled to publish his/her article in the Tax Management International Journal, which is produced by Bloomberg BNA.
Submission Deadline:  September 30, 2019.
Prize:  $2,000 cash, plus expenses-paid invitation to the IFA USA Branch Annual Meeting in Boston on Feb 27-28, 2010.

Here are the recent winners:

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

Thursday, February 28, 2019

Batchelder Delivers Pugh Lecture Today At San Diego On Optimal Tax Theory And Distributive Justice

BatchelderLily Batchelder (NYU) delivers the annual Richard Crawford Pugh Lecture on Tax Law & Policy at San Diego today on Optimal Tax Theory and Distributive Justice:

The literature on taxation and transfers includes two prominent egalitarian and consequentialist theories of distributive justice: Dworkin’s theory of resource egalitarianism, and welfare egalitarianism as elaborated through optimal tax theory. Advocates of each approach deny any substantial similarity with the other. This essay challenges that claim. It explores the ways in which the two theories overlap and diverge, and concludes that the gap between them is narrower than most appreciate. While the concerns motivating the two theories are fundamentally different, the ideal policy design principles implied by each largely mimic the other.

The failure of most of the existing literature to identify this similarity has two sources. First, objections to welfare egalitarianism and optimal tax theory are often predicated on an incomplete portrayal of what these theories actually say. Once read broadly and deeply, it becomes clear that they have compelling responses to many of the criticisms of resource egalitarians and other non-welfarists—including objections that they would reward so-called utility monsters, ignore non-market-based contributions to society, require those with high earning potential to work nonstop, and treat those who cannot act in their self-interest unfairly.

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

Williamson Presents A Field Experiment Assessing Voter Registration At Tax Time Today At Indiana

WilliamsVanessa Williamson (Brookings Institution) presents Filer Voter: A Field Experiment Assessing Voter Registration at Tax Time at Indiana today as part of its Tax Policy Colloquium Series hosted by David Gamage:

The Filer Voter experiment assessed the effectiveness of conducting voter registration drives at sites providing free income tax preparation assistance to low- and moderate-income households in Cleveland, OH, and Dallas, TX. We find that the program doubled the likelihood of unregistered tax filers registering to vote, and that new registrants voted in the following election at slightly higher rates than the state average. Moreover, the program did not measurably slow the tax preparation process. If the experience of the Filer Voter pilot program in Dallas and Cleveland were replicated at VITA programs nationwide, we would expect about 115,000 unregistered eligible voters to register to vote, including 63,000 people who would not otherwise register. These results indicate that the Filer Voter model has substantial potential to increase civic engagement at low cost to voters, tax preparers, and government institutions.

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

Galle Presents The Tax Exemption For Charitable Property: An Empirical Assessment Today At Duke

Galle (2016)Brian Galle (Georgetown) presents The Tax Exemption for Charitable Property: An Empirical Assessment at Duke today as part of its Tax Policy Workshop Series hosted by Lawrence Zelenak:

I offer the first multi-jurisdictional assessment of the balance-sheet effects of the property-tax exemption for charitable property. I combine a manually-assembled dataset of property tax rates in over 4,000 municipalities with three large samples of firm-level administrative data, as well as hand-coded variations in the legal details of different states’ exemption regimes, to assemble a panel of more than 1 million firm-years.

As expected, exemption causes charities to utilize more real property as tax rates rise. I offer new theoretical contributions showing that this effect, previously described as an unwanted distortion, may be second-best efficient in the presence of an income tax with accelerated depreciation, and confirm empirically the predictions of this new theory.

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

Raskolnikov Presents Selective Incentives Today At Northwestern

Raskolnikov (2018)Alex Raskolnikov (Columbia) presents Selective Incentives (with Giuseppe Dari-Mattiacci (NYU) at Northwestern today as part of its Law and Economics Colloquium Series:

Many public and private regulators do not rely on mandates and cannot tailor their regulatory instruments to the characteristics of individual agents. Rather, they use selective incentives–a mix of carrots and sticks intended to induce some agents both to participate in the regulatory scheme and to comply with the regulator’s conditions for participation. We show that when the participation and the compliance decisions are considered jointly, we must revise long-held beliefs about the effects of rewards and punishments, the benefits of monitoring, and the interaction between the design of substantive rules and their enforcement.

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February 28, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Wednesday, February 27, 2019

Viswanathan Presents Hyperlocal Responses To The SALT Deduction Limitation Today At UCLA

Viswanathan (2017)Manoj Viswanathan (UC-Hastings) presents Hyperlocal Responses to the SALT Deduction Limitation, 71 Stan. L. Rev. Online ___ (2019) at UCLA today as part of its Colloquium on Tax Policy and Public Finance hosted by Jason Oh:

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

Freedman Presents Rethinking Legal Taxonomies For The Gig Economy Today At Toronto

Freedman (2019)Judith Freedman (Oxford) presents Rethinking Legal Taxonomies for the Gig Economy: Tax Law, Employment Law, and Economic Incentives, 34 Oxford Rev. Econ. Pol'y 475 (2018) (with Abi Adams (Oxford) & Jeremias Prassl (Oxford)) at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:

Recent labour market changes, from an increase in the number of individuals running their own business to the fragmentation of traditional employment relationships into short-term, intermittent work for multiple engagers (“gigs”) have brought a host of challenges for regulators. The law struggles not least because long-established taxonomies used in tax and employment law are coming under increasing pressure. Legal regulation in these areas divides the labour market into a number of predetermined categories, to which benefits and obligations (rights and duties) are then attached. The tests determining into which category an individual falls are unclear and too easily manipulated. In particular, there is a real lack of clarity as to how categories in employment and tax law should map onto each other.

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

Leff: A Universal Basic Income Through The EITC

Benjamin M. Leff (American), EITC For All: A Universal Basic Income Compromise Proposal, 25 Wash. & Lee. J. C.R. & Soc. Just. ___ (2019):

Universal Basic Income ("UBI") is a concept that has recently begun to enter the popular political consciousness in the United States. It is defined as "a regular cash income paid to all, on an individual basis, without means test or work requirement." It is invoked for a wide variety of political and social purposes, but is almost always presented as radically different from existing governmental welfare and transfer systems. Once a UBI is disaggregated into discrete policy components, it is possible to imagine to what degree existing programs share the benefits (and detriments) of a UBI to a greater or lesser degree, and reforms could be made to make existing programs more "UBI-like," if that would be beneficial.

This Article re-envisions a UBI as a series of reforms to one of the largest existing governmental transfer program in the US: the Earned Income Tax Credit (EITC).

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

Thomas: The EITC In The Age Of TurboTax

Jotwell (Tax) (2016)Kathleen DeLaney Thomas (North Carolina), Increasing EITC Take-Up in the Age of TurboTax, (JOTWELL) (reviewing Jacob Goldin (Stanford), Tax Benefit Complexity and Take-Up: Lessons From the Earned Income-Tax Credit (reviewed by Ari Glogower (Ohio State) here)):

One dilemma for policymakers is how to get people to take advantage of social welfare programs. In the case of the Earned Income Tax Credit (“EITC”), the goal is to encourage eligible individuals to claim the credit on their tax return. Take-up rates for the EITC are quite good (about 80% overall), but ideally would be higher. Typically the approach to increasing EITC take-up is information campaigns, like EITC awareness day. The conventional wisdom has been that the more people know about the EITC, the more likely eligible recipients are to claim it. But is it right that advance notice is important? If people use tax software that will automatically calculate the EITC for them, how important is it that they are made aware of the benefit ahead of time? Perhaps not very, as suggested by Jacob Goldin in his forthcoming article, Tax Benefit Complexity and Take-up: Lessons from the Earned Income Tax Credit.

The key insight from Goldin’s article is that in the modern age, virtually anyone who files a tax return is presented with the opportunity to claim the EITC. This is because the vast majority of taxpayers—96 percent in 2015 according to Goldin—use assisted preparation methods (“APMs”) such as self-preparation software or a tax return preparer. Using either of those methods, it is extremely unlikely to fail to claim the credit accidentally. (Though, as Goldin notes, some taxpayers may consciously choose not to claim the credit even though they are eligible.) The paper’s main conclusion is logical yet important: people who are eligible for the EITC but who fail to claim it are generally people who fail to file returns at all. Thus, if policymakers want to increase EITC take-up, they must increase the filing rate.

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