TaxProf Blog

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

Tuesday, February 5, 2019

Mason Presents Benchmarking Illegal Subsidies Today At Georgetown

Mason (2016)Ruth Mason (Virginia) presents Benchmarking Illegal Subsidies at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by John Brooks and Lilian Faulhaber:

The United States vigorously contests the EU Commission’s recent decisions that U.S. multinationals received illegal tax subsidies from EU Member States, including its decision that Apple must pay a staggering $14.5 billion in back taxes to Ireland. The controversy involves the Commission’s departure from a traditional tax-expenditure approach to identifying subsidies.Under the traditional approach—employed in EU, U.S., and WTO law—a state confers a tax subsidy only when it deviates from its own regularly applicable tax law to relieve a company of taxes normally due. Because the recent EU cases involved “structural mismatches” that are not susceptible to reference-law benchmarking, however, the Commission advanced a radical normative approach , under which a state confers an illegal subsidy when it deviates from ideal tax rules to favor companies.

This Article argues that rather than turning to normative benchmarking, the Commission could have made structural mismatches tractable under a reference-law benchmark by borrowing the “internal consistency test,” an approach developed by the U.S. Supreme Court to analyze tax discrimination under the dormant Commerce Clause.

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

Fogg Posts Two Tax Papers On SSRN

SSRN Logo (2018)Keith Fogg (Harvard) has posted two tax papers on SSRN:

Can the Taxpayer Bill of Rights Assist Your Clients?, 92 Temple L. Rev. ___ (2019):

Congress has added a Taxpayer Bill of Rights (TBOR) to the Internal Revenue Code following the administrative adoption by the IRS of the identical slate of rights. The question for taxpayers and practitioners with respect to TBOR concerns its impact, if any, in seeking a remedy for certain IRS behavior.

Practitioners have begun to argue for remedies based on the rights enumerated in TBOR. Facebook became one of the first taxpayers to seek to use TBOR to obtain a right that the IRS had otherwise denied. The Tax Court found that the remedy Facebook sought based on perceived rights in TBOR was not a remedy the court could provide. In the Facebook case the IRS followed the guidance set forth in a Revenue Procedure.

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

Monday, February 4, 2019

Oh Presents The Effects Of Capital Gains Rate Uncertainty On Realization Today At Pepperdine

OhJason Oh (UCLA) presents The Effects of Capital Gains Rate Uncertainty on Realization (with David Kamin (NYU)) 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:

Taxpayers should expect capital gains rates to fluctuate in light of frequent historical changes and the current divergence of rates preferred by Democrats and Republicans. This paper is the first to model the effect of such rate uncertainty on the realization incentives of asset holders and finds those effects to be potentially large. There are several implications. First, rate uncertainty may alleviate the lock-in effect of the realization rule when rates are low and exacerbate lock-in when rates are high. Second, there could be significant inaccuracies extrapolating the elasticity of capital gains realizations measured at one rate to another. Third, some policy solutions aimed at addressing distortions created by the realization rule may not work as well as expected.

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

Kades: Of Piketty And Perpetuities — Dynastic Wealth In The 21st Century

Eric Kades (William & Mary), Of Piketty and Perpetuities: Dynastic Wealth in the Twenty-First Century (and Beyond), 60 BC L. Rev. 145 (2019):

For the first time since independence, in a nation founded in large part on the rejection of a fixed nobility determined by birth and perpetuated by inheritance, America is paving the way for the creation of dynastic family wealth. Abolition of the Rule Against Perpetuities in over half the states along with sharp reductions in, and likely elimination of, the federal estate tax mean that there soon will be no obstacles to creating large pools of dynastic wealth insuring lavish incomes to heirs for generations without end. The timing of these legal changes could hardly be worse. Marshaling innovative economic data extending back centuries, Thomas Piketty has shown that the relatively egalitarian incomes enjoyed in developed economies from the end of World War II until around 1980 were an aberration and that we are in the process of returning to the historical norm of much greater income and wealth inequality. This Article shows, unhappily, that this revival of unending inherited wealth is of even greater concern than previously thought.

Kades 1

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

How To Design Carbon Dividends

Donald Marron & Elaine Maag (Urban Institute), How to Design Carbon Dividends:

A robust carbon tax would generate considerable revenue. Some carbon tax advocates have suggested returning those revenues to Americans through direct payments, often called carbon dividends. We examine how to design these dividends considering two, sometimes conflicting, principles. Carbon dividends can be viewed as shared income from a communal property right, much as Alaskans share in income from the state’s oil resources. Dividends can also be viewed as rebating the carbon tax back to consumers. These views often have different implications for designing carbon dividends. Political and practical considerations are also important.

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

Lesson From The Tax Court: The Pain of Disappointment

SabanThere are two pains in life. There is the pain of discipline and the pain of disappointment. If you can handle the pain of discipline, then you’ll never have to deal with the pain of disappointment.
Nick Saban

Nick Saban may be a great coach, but that aphorism is unhelpful in its opaqueness. Perhaps he means that if you are disciplined enough, or prepared enough, no type of disappointment can hurt you because you will have done your best. If that’s his idea, litigators likely disagree. The pain of disappointment permeates any litigator’s professional life. Even the most disciplined litigators have to deal with the disappointment of adverse fact finding by a judge or jury. 

Last week it was government litigators’ turn to feel the pain of disappointment, in the case of 2590 Associates v. Commissioner, T.C. Memo. 2019-3 (Jan. 31, 2019). The case teaches a substantive lesson about the §166 bad debt deduction and a procedural lesson about the power of fact-finders, here Judge Goeke. It's a fun case to follow a Super Bowl Sunday because it tangentially involves Nick Saben. The mainstream press erroneously types it as Nick Saban's win over the IRS. That is wrong.  Saban was neither a party to the litigation nor did its outcome affect his taxes. He had already taken his winnings long before the litigation even commenced. Details and lessons below the fold.

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February 4, 2019 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure | Permalink | Comments (2)

UC-Irvine Conference: Tax Reform — One Year Later

UC Irvine Logo (2019)The UC-Irvine Graduate Tax Program hosts its first annual tax conference on Tax Reform: One Year Later on Monday, February 11.  The keynote speaker is Mark Prater (Managing Director, Tax Policy Services, PriceWaterhouseCoopers (Washington, D.C.)).

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

Sunday, February 3, 2019

The Top Five New Tax Papers

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

  1. [504 Downloads]  Spiritus Ex Machina: Addressing the Unique BEPS Issues of Autonomous Artificial Intelligence by Using 'Personality' and 'Residence', by Lucas de Lima Carvalho (University of Sao Paulo)
  2. [403 Downloads]  How Data Should (Not) Be Taxed, by Johannes Becker (University of Muenster), Joachim Englisch (University of Muenster) & Deborah Schanz (Ludwig Maximilian University of Munich)
  3. [376 Downloads]  Ten Reasons to Prefer Tax Partnerships Over S-Corporations, by Bradley Borden (Brooklyn)
  4. [305 Downloads]  The Impact of Soda Taxes: Pass-through, Tax Avoidance, and Nutritional Effects, by Stephen Seiler (Stanford), Anna Tuchman (Northwestern) & Song Yao (Minnesota)
  5. [281 Downloads]  The Proposed Section 163(j) Regulations, by David Miller, Sejin Park, Mani Kakkar & Sean Webb (Proskauer)

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

Saturday, February 2, 2019

Estate Planning For Your Dog

Gerry W. Beyer (Texas Tech) & Barry Seltzer, Don't Forget About Pets When Planning for Disability and Death, 42:3 Generations 109 (2018):

Dogs, cats, parrots, and other pet animals play significant roles in the lives of many individuals. The bond between a pet owner and his or her companion is strong, and recent studies show that this bond can be even deeper with older owners. Accordingly, it is of vital importance to include pets when a pet owner, especially an older one, makes plans for disability and death. This article provides an overview of the techniques a pet owner should consider when planning his or her estate.

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February 2, 2019 in Scholarship, Tax | Permalink | Comments (3)

Friday, February 1, 2019

Weekly SSRN Tax Article Review And Roundup: Wallace Reviews Aprill's Enterprise Zones

This This week, Clint Wallace (South Carolina) reviews an old work (newly posted to SSRN) by Ellen Aprill (Loyola-L.A.), Caution: Enterprise Zones (66 S. Cal. L. Rev. 1341 (1993).

Wallace (2019)Twenty five years ago we stood at the dawn of the age of “targeted tax cuts.” President Clinton introduced that terminology to the political lexicon, and his administration added all variety of politically appealing tax breaks to the Code, seeking to expand access to college, help make healthcare more affordable, and promote home ownership, among other goals. One version of political-rally-friendly tax policy that the Clinton administration promoted with particular enthusiasm was geographically targeted tax breaks.  In 1993, Prof. Aprill published an article (new to SSRN this week) critiquing and offering guidance on how to effectively design this kind of tax incentive.

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February 1, 2019 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Toder Presents Distributional Effects Of Individual Income Tax Expenditures After The 2017 Tax Act Today At Boston College

Toder (2017)Eric Toder (Tax Policy Center) presents Distributional Effects of Individual Income Tax Expenditures After the 2017 Tax Cuts and Jobs Act (with Daniel Berger (Tax Policy Center)) at Boston College today as part of its Tax Policy Workshop Series hosted by Shu-Yi Oei, Jim Repetti, and Diane Ring:

After taking account of interactions among provisions, non-business tax expenditures will reduce tax liability by $1.2 trillion in 2019, about 5 percent more than the sum of the costs of the separate provisions. Tax expenditures, on average, reduce taxes as a share of income more for upper-income than for lower-income taxpayers. The Tax Cuts and Jobs Act (TJCA) of 2017 reduced and eliminated some tax expenditures, increased others, and introduced a new preference for business income of individual taxpayers. Changes in tax rates and the standard deduction also reduced tax expenditures.

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

Simkovic: Billionaire Taxes

Simkovic (2018)TaxProf Blog op-ed:  Billionaire Taxes, by Michael Simkovic (USC):

Alternatives to Elizabeth Warren’s ultra-high net-worth wealth tax are riddled with loopholes

Senator Elizabeth Warren recently proposed an ultra-high net-worth wealth tax that would raise hundreds of billions in revenue per year while taking no money from 99.9% of U.S. households. Warren would annually tax household fortunes above $50 million at 2 percent of their value, and fortunes above $1 billion at 3 percent. 99.5% of U.S. households have net worth’s below $16.5 million according to the Survey of Consumer Finance. Even highly successful, hard-working, and well-educated people are extremely unlikely to pay a dime because of this proposed tax.

You do not have to favor government spending to support a high-net-worth tax. While Warren envisions using the revenue to fund public investment programs to support the middle class, tax revenue could instead be used to fund tax relief for middle class and poor Americans. The middle class and the working poor and their employers pay payroll taxes—literally a tax on wages—which collectively exceed 15% of wages below $133,000 per year. This tax wedge drives up the cost of U.S. labor for employers and drives down take-home pay for workers.

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

Georgetown/International Tax Policy Forum Conference: Who Should Tax International Income?

GITEPThe Georgetown Law School Institute of International Economic Law (IIEL) and the International Tax Policy Forum (ITPF) host a conference today on Who Should Tax International Income? (program):

Panel #1: Recent Efforts to Assert Taxing Right

  • James R. Hines, Jr. (Michigan) (moderator)
  • William Morris (PwC)

Panel #2: Expanding Source, Destination, and User Taxation

  • Mihir Desai (Harvard) (moderator)
  • Michael Devereux (Oxford)
  • Lilian Faulhaber (Georgetown)
  • Ruud de Mooij (IMF)

Panel #3: Strengthening Residence-Basis Taxation

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

Taxes And U.S. Oil Production

Nirupama L. Rao (Michigan), Taxes and U.S. Oil Production: Evidence from California and the Windfall Profit Tax, 10 Am. Econ. J.: Econ. Pol'y 268 (2018):

The recent boom in U.S. oil production has prompted debates on levying new taxes on oil. This paper uses new well-level production data and price variation from federal oil taxes and price controls to assess how taxes affected production. After-tax price elasticity estimates range between 0.295 (0.038) and 0.371 (0.025). Response along the shut-in margin is minimal. There is no evidence of spatial shifting of production to minimize tax liabilities. Taken together the results suggest that taxes reduced domestic production in the 1980s, and the response largely came from wells that continued to pump oil, but at a reduced rate.

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

Thursday, January 31, 2019

Thomas Presents The Modern Case For Withholding Today At Duke

Thomas (2017)Kathleen Delaney Thomas (North Carolina) presents The Modern Case for Withholding at Duke today as part of its Tax Policy Workshop Series hosted by Lawrence Zelenak:

Who is responsible for paying taxes to the government? Currently, the answer depends on one’s employment status. Employees enjoy the luxury of not having to think about tax remittance during the year because their employers withhold taxes from their paychecks. Non-employees, on the other hand, face a much more onerous system. They must keep track of and budget for taxes during the year, make quarterly remittances to the IRS, and may face penalties for failing to do so. Although this regime has been in place for many decades, there are several reasons why reform may be in order.

First, the rise of the Internet and other advances in technology have made withholding taxes by third parties more efficient and less costly than was historically the case. Second, advances in the social sciences have shed new light on why many taxpayers appear to prefer withholding and why it may serve to enhance overall welfare. Finally, the independent contractor workforce is expanding, propelled in large part by the growth of the gig economy. This means an increasing number of taxpayers are earning income outside of employment that is not captured by withholding, which imposes social costs and facilitates tax evasion.

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January 31, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Batchelder Presents Optimal Tax Theory As A Theory Of Distributive Justice Today At Indiana

Lily Batchelder (NYU) presents Optimal Tax Theory as a Theory of Distributive Justice at Indiana today as part of its Tax Policy Colloquium Series hosted by David Gamage.

January 31, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

U.S. v. Davis And Prof. Cain’s Rewritten Opinion: An Intersectional Argument For Capping Section 1041

Diane Klein (La Verne), U.S. v. Davis and Prof. Cain’s Rewritten Opinion: An Intersectional Argument for Capping Section 1041:

Tax cases are about rich people. Given the demographic distribution of income and wealth in the United States, that means tax cases are mostly about rich White people. The tax issue in Davis can be stated simply: when shall transfers of appreciated assets incident to divorce be taxed? But thinking about these rules only from the point of view of the taxpayers themselves, and what is “fair” inter se or as compared to others similarly situated, may distract us from seeing broader issues also properly considered in tax policy. When we take into account not just sex/gender and marital status, but also race and class, the focus on one sort of inequality (between divorcing couples in different states) obscures another that is larger and more far-reaching (race-based wealth inequality). To address this, I suggest an amendment to Section 1041, a limit on tax-free transfers of appreciated assets incident to divorce. 

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January 31, 2019 in Scholarship, Tax | Permalink | Comments (2)

Cranor & Goldin: Does Informing Employees About Tax Benefits Increase Take-Up?

Taylor Cranor (J.D. 2022, Yale) & Jacob Goldin (Stanford), Does Informing Employees About Tax Benefits Increase Take-Up?: Evidence From EITC Notification Laws:

Incomplete take-up of the Earned Income Tax Credit (EITC) is a source of persistent policy concern, with an estimated one-fifth of eligible households failing to claim the credit. To promote take-up, a growing number of jurisdictions require employers to provide EITC information to employees. We study the effect of these requirements, linking state and time variation in the adoption of the notification laws to administrative tax data.

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January 31, 2019 in Scholarship, Tax | Permalink | Comments (0)

Wednesday, January 30, 2019

SSRN Tax Professor Rankings

SSRN Logo (2018)SSRN has updated its monthly rankings of 750 American and international law school faculties and 3,000 law professors by (among other things) the number of paper downloads from the SSRN database.  This ranking includes downloads from two 30- and 35-page papers by 12 tax professors on the new tax legislation that garnered a lot of media attention (including the New York Times and Washington Post) and generated a massive amount of downloads (the papers are the most downloaded papers over the past 12 months across all of SSRN and the most downloaded tax papers of all-time by over 200%).  See Brian Leiter (Chicago), 11 Tax Profs Blow Up The SSRN Download Rankings. (For some reason, Mitchell Kane (NYU) — the twelfth academic co-author of the two papers — is not included in the SSRN download rankings (although the downloads are included on his individual author page)).  Here is the new list (through December 30, 2018) of the Top 25 U.S. Tax Professors in two of the SSRN categories: all-time downloads and recent downloads (within the past 12 months):

 

 

All-Time

 

Recent

1

Reuven Avi-Yonah (Mich.)

181,138

Reuven Avi-Yonah (Mich.)

38,425

2

Dan Shaviro (NYU)

116,407

Daniel Hemel (Chicago)

36,224

3

David Gamage (Indiana)

112,061

David Gamage (Indiana)

31,785

4

Lily Batchelder (NYU)

109,917

Darien Shanske (UC-Davis) 

31,572

5

Daniel Hemel (Chicago)

109,616

Manoj Viswanathan (Hastings)

30,983

6

Darien Shanske (UC-Davis)

106,140

Dan Shaviro (NYU)

30,969

7

Cliff Fleming (BYU)

101,597

Lily Batchelder (NYU)

28,620

8

Manoj Viswanathan (Hastings)

98,469

David Kamin (NYU)

28,593

9

David Kamin (NYU)

98,444

Ari Glogower (Ohio State)

28,333

10

Rebecca Kysar (Fordham)

97,750

Cliff Fleming (BYU)

28,326

11

Ari Glogower (Ohio State)

95,987

Rebecca Kysar (Fordham) 

28,159

12

Michael Simkovic (USC)

41,885

Jacob Goldin (Stanford)   3,979

13

D. Dharmapala (Chicago)

35,883

Joe Bankman (Stanford)

3,520

14

Paul Caron (Pepperdine)

34,923

Richard Ainsworth (BU)

3,494

15

Louis Kaplow (Harvard)

30,698

Michael Simkovic (USC)

3,487

16

Richard Ainsworth (BU)

26,407

Kirk Stark (UCLA)

3,401

17

Ed Kleinbard (USC)

25,369

Dennis Ventry (UC-Davis)

3,120

18

Vic Fleischer (UC-Irvine)

25,151

D. Dharmapala (Chicago)

3,027

19

Jim Hines (Michigan)

24,115

Ruth Mason (Virginia) 

2,680

20

Gladriel Shobe (BYU)

23,803

Sam Donaldson (Georgia St.)

2,534

21

Richard Kaplan (Illinois)

23,213

Brad Borden (Brooklyn)

2,498

22

Ted Seto (Loyola-L.A.)

23,067

Kyle Rozema (Chicago)

2,267

23

Katie Pratt (Loyola-L.A.)

21,625

Hugh Ault (Boston College) 

2,065

24

Robert Sitkoff (Harvard)

21,512

Shu-Yi Oei (Boston College)

2,045

25

David Weisbach (Chicago)

20,663

Margaret Ryznar (Indiana-Indy)

1,870

Note that this ranking includes full-time tax professors with at least one tax paper on SSRN, and all papers (including non-tax papers) by these tax professors are included in the SSRN data.

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January 30, 2019 in Scholarship, Tax, Tax Prof Rankings | Permalink | Comments (0)

Homeownership Tax Subsidies And Structural Racism

Victoria J. Haneman (Creighton), Contemplating Homeownership Tax Subsidies and Structural Racism, 54 Wake Forest L. Rev. ___ (2019):

An insidious form of racism is facilitated by those who are heedless of structural inequities — or in this instance, the fact that legal structures have been developed to protect the experiences of those who are white, with an underlying obliviousness to the fact that persons of color may have a different experience. Almost 80% of the United States’ four centuries of existence has involved racialized slavery and extreme racial segregation. The subject of structural discrimination should be almost noncontroversial by this point: established social and political structures have been built upon a foundation of racial inequality, inherently conferring power and privilege to some, while perpetuating the marginalization of others. A system that treats equally those who are positioned unequally will only serve to exacerbate the pre-existing inequalities.

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

Tuesday, January 29, 2019

Kysar Presents Unravelling The Tax Treaty Today At NYU

Kysar (2018)Rebecca Kysar (Fordham) presents Unravelling the Tax Treaty at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

Coordination among nations over the taxation of international transactions rests on a network of some 2,000 bilateral double tax treaties. The double tax treaty is, in many ways, the roots of the international system of taxation. That system, however, is in upheaval in the face of globalization, technological advances, taxpayer abuse, and shifting political tides. In the academic literature, however, scrutiny of tax treaties is largely confined to the albeit important question of whether tax treaties are beneficial for developing countries. Surprisingly little consideration has been paid to whether developed countries, like the United States, should continue to sign tax treaties with one another, and no formal revenue or economic analyses of the treaties has been undertaken by the United States government. In fact, little evidence or theory exists to support entrance into tax treaties by the United States, and examination of investment flows indicates the treaties likely lose significant U.S. revenues. Additionally, they enable taxpayer abuse, stagnate domestic policy, and thwart reforms of the antiquated international tax system. These consequences are particularly problematic for the United States. Other nations, after all, have been able to supplement their revenues and pursue destination-based taxation through treaty-friendly VATs.

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January 29, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

The Most Downloaded Tax Professors In 2018

  1. SSRN Logo (2018)Reuven Avi-Yonah (Michigan):  38,425
  2. Daniel Hemel (Chicago):  36,224
  3. David Gamage (Indiana):  31,785
  4. Darien Shanske (UC-Davis):  31,572
  5. Manoj Viswanathan (UC-Hastings):  30,983
  6. Dan Shaviro (NYU):  30,969
  7. Lily Batchelder (NYU):  28,620
  8. David Kamin (NYU):  28,593
  9. Ari Glogower (Ohio State):  28,333
  10. Cliff Fleming (BYU):  28,326
  11. Rebecca Kysar (Fordham):  28,159
  12. Jacob Goldin (Stanford):   3,979
  13. Joe Bankman (Stanford):  3,520
  14. Richard Ainsworth (Boston University):  3,494
  15. Michael Simkovic (USC):  3,487
  16. Kirk Stark (UCLA):  3,401
  17. Dennis Ventry (UC-Davis):  3,120
  18. Dhammika Dharmapala (Chicago):  3,027
  19. Ruth Mason (Virginia):  2,680
  20. Sam Donaldson (Georgia State):  2,534
  21. Brad Borden (Brooklyn):  2,498
  22. Kyle Rozema (Chicago):  2,267
  23. Hugh Ault (Boston College):  2,065
  24. Shu-Yi Oei (Boston College):  2,045
  25. Margaret Ryznar (Indiana-Indianapolis):  1,870

January 29, 2019 in Scholarship, Tax, Tax Prof Rankings | Permalink | Comments (0)

The Lasting Impact Of IRS Audits on Tax Compliance

Jason DeBacker (Middle Tennessee State), Bradley T. Heim (Indiana), Anh Tran (Indiana) & Alexander Yuskavage (Office of Tax Analysis, U.S. Treasury Department), Once Bitten, Twice Shy?: The Lasting Impact of IRS Audits on Tax Compliance, 61 J.L. & Econ. 1 (2018):

This paper studies the impact of tax enforcement activity on subsequent individual taxpaying behavior. We exploit four waves of randomized Internal Revenue Service (IRS) audits of individual income tax filers during the 2006-2009 period to study both the short and long run effects of audits on taxpaying behavior. Rich and confidential IRS data allow us to show the differential impact of audits across sources of income and deductions. The results highlight how the effects of audits on subsequent compliance behavior are impacted by other aspects of tax policy.

January 29, 2019 in Scholarship, Tax | Permalink | Comments (0)

Monday, January 28, 2019

Lawsky Presents Form As Formalization Today At Wayne State

Lawsky (2017)Sarah Lawsky (Northwestern) presents Form as Formalization at Wayne State today as part of its Charles H. Gershenson Faculty Workshop Series:

There are, roughly speaking, two approaches to applying computing to law, which can be thought of as a bottom up approach and a top down approach. The bottom up approach uses large amounts of data in some way—to make predictions, for example. Machine learning is one such approach; neural nets are another. This is generally seen to be the approach with the most potential, the one that leads to the “data driven future” of legal practice. The “top down” approach would derive conclusions from the law itself, after making the law legible to the computer in some way, perhaps through hand-encoding, perhaps through natural language processing or some similar approach to read the actual text of a statute or regulation.

The top-down approach, also sometimes called computational law, is generally considered to have much less potential. But even those whose dismiss computational law point to one example of success in encoding the law: TurboTax and similar tax compliance programs. Thus one finds enthusiastic references to creating “TurboTax for police complaints,”“TurboTax for copyright,” “TurboTax for immigration,” and so forth.

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

Lesson From Congress: Overbearing Oversight?

Senate_budget_committeeToday’s lesson comes from Congress.  It is a primer on IRS oversight.  It was prompted by an amazing letter I found buried on my desk.  

In an October 2015 hearing, House Ways and Means Committee member Diane Black questioned then IRS Commissioner John Koskinen about the lack of IRS responses to 10 GAO oversight recommendations from July 2015. 

On October 23, 2015, Koskinen sent her a letter.  The letter explained the status of the 10 oversight recommendations.  It then also explained the status of 200 additional recommendations from the prior three years, recommendations the IRS had also not responded to.  Of the 210 total, 167 had not yet reached their original due dates for responsive actions.  The other 43 were late but had received extensions from the oversight bodies who had made the recommendations: the Government Accountability Office (GAO) and the Treasury Inspector General for Tax Administration (TIGTA). 

The number 210 is not the amazing part.  The amazing part is that the letter explained that during that same three-year period, the IRS has dealt with some 1,240 oversight recommendations just from GAO and TIGTA.  That number does not even include the myriad directives and orders from various Congressional oversight committees, nor the yearly Congressional-mandated oversight from the National Taxpayer Advocate.  Thinking about the FTE’s needed to address just these 1,240 recommendations makes me dizzy. 

I think you will be impressed by the amount of oversight the IRS is subject to; I make no prediction on whether your impression will be good or bad.  But I hope today's lesson helps you understand that, as the IRS re-opens with its depleted workforce, it faces more than the tsunami of correspondence from worried taxpayers, and a first return filing season under the wicked complexities of the Tax Cuts and Jobs Act.  It must also keep responding to a relentless review of every facet of its operations.  Most of the review is done in good faith.  Some of it is not, as I explain below the fold.  But either way, one can reasonably ask how much is too much.  Does the amount of oversight truly make for better tax administration, or not.

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January 28, 2019 in Bryan Camp, Congressional News, Miscellaneous, Scholarship, Tax | Permalink | Comments (0)

Sunday, January 27, 2019

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 new papers debuting on the list at #1, #2, and #3:

  1. [409 Downloads]  Spiritus Ex Machina: Addressing the Unique BEPS Issues of Autonomous Artificial Intelligence by Using 'Personality' and 'Residence', by Lucas de Lima Carvalho (University of Sao Paulo)
  2. [380 Downloads]  How Data Should (Not) Be Taxed, by Johannes Becker (University of Muenster), Joachim Englisch (University of Muenster) & Deborah Schanz (Ludwig Maximilian University of Munich)
  3. [305 Downloads]  Ten Reasons to Prefer Tax Partnerships Over S-Corporations, by Bradley Borden (Brooklyn)
  4. [267 Downloads]  The Impact of Soda Taxes: Pass-through, Tax Avoidance, and Nutritional Effects, by Stephen Seiler (Stanford), Anna Tuchman (Northwestern) & Song Yao (Minnesota)
  5. [230 Downloads]  The Proposed Section 163(j) Regulations, by David Miller, Sejin Park, Mani Kakkar & Sean Webb (Proskauer)

January 27, 2019 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, January 26, 2019

The Constitutionality Of Elizabeth Warren's Proposed Federal Wealth Tax

Following up on yesterday's post, Elizabeth Warren Proposes Annual Federal Wealth Tax On Net Worth > $50 Million:

Ari Glogower (Ohio State), A Constitutional Wealth Tax:

Policymakers and scholars are giving serious consideration to a federal wealth tax. Wealth taxation could address the harms from rising economic inequality, promote equality of social and economic opportunity, and raise the revenue needed to fund critical government programs. These reasons for taxing wealth may not matter, however, if a federal wealth tax is unconstitutional.

Scholars debating the constitutionality of a wealth tax generally focus on a specific question: Would a tax on a base of a taxpayer’s wealth (a “traditional wealth tax”) be a “direct tax” under the Constitution that is subject to apportionment among the states by population? Apportionment would be impossible such a tax, which explains the centrality of this question in the prior literature.

This Article argues, in contrast, that the possible constitutional restrictions on a traditional wealth tax may not matter. If the Supreme Court were to find that the Constitution foreclosed a traditional wealth tax, Congress could instead tax wealth indirectly, by adjusting a taxpayer’s income tax liability on account of her wealth. This Article describes three methods for making this adjustment (collectively, “Wealth Integration” methods): A taxpayer’s wealth could affect her base of taxable income (the “Base Method”), the applicable rate schedule (the “Rate Method”) or the availability of credits against tax (the “Credit Method”).

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January 26, 2019 in Scholarship, Tax | Permalink | Comments (10)

Friday, January 25, 2019

Weekly SSRN Tax Article Review And Roundup: Kleiman Reviews The Impact of Soda Taxes

This week, Ariel Jurow Kleiman (San Diego) reviews a new work by Stephen Seiler (Stanford), Anna Tuchman (Northwestern) & Song Yao (Minnesota), The Impact of Soda Taxes: Pass-through, Tax Avoidance, and Nutritional Effects (Stanford University Graduate School of Business Research Paper, No. 19-12).

StevensonIf a tax could be considered trendy, the label would aptly apply to the soda tax.  In 2013, no U.S. city levied a tax on sugary drinks. Today, seven major cities do so (see also here). Such taxes have also been enacted at the national level in a diverse group of countries including Mexico, France, and Sri Lanka. The tax’s proliferation heightens the need for data on its efficacy, especially when implemented at the local level. Stephan Seiler, Anna Tuchman, and Song Yao’s recent work on Philadelphia’s tax on sugar-sweetened beverages responds to such a need. Their research offers valuable insights for public health advocates and policymakers considering a soda tax, whether as a source of revenue or as a response to increasing obesity rates.

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January 25, 2019 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Hemel: The Nonprofit Sector And The Federal Tax System

Daniel Hemel (Chicago), Tangled Up in Tax: The Nonprofit Sector and the Federal Tax System, in The Nonprofit Sector: A Research Handbook (3rd ed., Patricia Bromley & Walter Powell eds., Stanford University Press, 2019):

If the relationship between the federal tax system and the nonprofit sector is to be summed up in a single word, “entanglement” rather than “exemption” would be the appropriate term. Nonprofit organizations in the United States are caught in a complex web of nonprofit-specific tax provisions, and even seemingly unrelated tax statutes often tie back to the nonprofit sector in winding ways. This chapter seeks to understand how the federal tax laws lead to and limit the nonprofit sector’s entanglement with the public and for-profit sectors. It distinguishes among three types of entanglement—administrative entanglement, political entanglement, and market entanglement—and goes on to explain how society’s decisions to support the nonprofit sector through tax exemptions and tax deductions both respond to and result in entanglement of all three types. It then evaluates the specific strategies of entanglement management that the federal tax system employs.

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January 25, 2019 in Scholarship, Tax | Permalink | Comments (0)

The Value Of Legal Writing, Law Review, And Publication

Lawrence J. Trautman (Western Carolina University, College of Business), The Value of Legal Writing, Law Review, and Publication, 51 Ind. L. Rev. 693 (2018):

While highly developed communication skills contribute substantially to success in other professions and in our personal relationships, legal research and writing is likely the foundation for a successful career in the law. Law review articles are cited by judges in their opinions, by Congress and regulatory authorities in the making of law, and regulations and policy. Any great legal orator, litigator, or Supreme Court Justice will need the benefit of quickly recognizing legally significant fact patterns, the ability to conduct research regarding statutory and case law, and the ability to make compelling, cogent legal arguments. The experience gained from legal research and writing sharpens all these tools.

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January 25, 2019 in Legal Education, Scholarship | Permalink | Comments (1)

Thursday, January 24, 2019

Raskolnikov Presents Distributional Ignorance Today At Duke

Raskolnikov (2018)Alex Raskolnikov (Columbia) presents Distributional Ignorance at Duke today as part of its Tax Policy Workshop Series hosted by Lawrence Zelenak:

No modern government can ignore distribution with impunity, and the U.S. government is no exception. Yet in all likelihood, U.S. policymakers did ignore large and widespread distributional effects of their policies ranging from trade to immigration, competition, capital market regulation, environmental protection, and others. Although each of these policies affected many people, it just so happened that most of them likely disadvantaged a particular group of Americans consisting of low-skill, low-education, pre-retirement-age workers. These workers are the likely casualties of distributional ignorance. Not surprisingly, they are also some of the most ardent opponents of many U.S. policies adopted over the past several decades.

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January 24, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Ring Presents Tax Law's Workplace Shift Today At Ohio State

Ring (2017)Diane Ring (Boston College) presents Tax Law's Workplace Shift (with Shu-Yi Oei (Boston College)) at Ohio State today as part of its Faculty Workshop Series hosted by Ari Glogower:

In December 2017, Congress passed major tax reform, including new § 199A of the Internal Revenue Code. This new provision grants independent contractors and other passthrough taxpayers—but not employees or corporations—a potential deduction equal to 20% of their qualified business income. This deduction will affect tens of millions of taxpayers and may be a significant boon to those eligible. Critics argue that the deduction may cause a large-scale workplace shift in favor of independent contractor jobs, as workers seek to take the new deduction. Such a shift could cause workers who leave traditional employment to lose important employee protections and benefits, leaving them more vulnerable.

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January 24, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Borden: Tax Tips For Leasing Lawyers

Bradley T. Borden (Brooklyn), Basic and Non-Basic Tax Tips for Leasing Lawyers, Practical Real Estate Lawyer, Vol.35, p.48, Jan. 2019:

Leases raise numerous tax issues. Attorneys advising landlords and tenants should be aware of the general tax aspects of leases and know of more complicated tax issues that may affect leases and be prepared to introduce those issues to experts in taxation of leases. This article covers basic tax aspects of leases, including the character and timing of rental income and rent deductions; the deductibility of tenant improvements; and the consequences to the landlords and tenants of lease terminations, including leases with tenant improvements.

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January 24, 2019 in Scholarship, Tax | Permalink | Comments (0)

Wednesday, January 23, 2019

Kleiman Presents Tax Limits And Public Control Today At Pepperdine

KleimanAriel Jurow Kleiman (San Diego) presents Tax Limits and Public Control at Pepperdine today as part of our Tax Policy Workshop Series hosted by Dorothy Brown and Paul Caron:

Local governments are severely restricted in their ability to raise tax revenue, in part by state-level statutes that place caps on local tax rates and revenue. Many attribute the proliferation of these local tax limitations to entrenched antitax sentiment among U.S. taxpayers. This antitax narrative is attractive for its simplicity and explanatory power. It provides a clear mandate for those enacting tax limiting laws as well as a simple fiscal rubric for those evaluating the success of such limits—namely, lower taxes equals success. However, the explanatory power of the antitax narrative is limited. Perhaps most notably, it fails to explain why voters regularly approve tax increases, even in places with strict tax limitations. Using the lens of the 1970s Tax Revolt, this Article complicates the traditional antitax narrative surrounding tax limitations, offering evidence that voters also supported tax limits in order to increase public control and oversight of local government fiscal decisions.

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January 23, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Kysar Presents Unravelling The Tax Treaty Today At Toronto

Kysar (2018)Rebecca Kysar (Fordham) presents Unravelling the Tax Treaty at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:

Coordination among nations over the taxation of international transactions rests on a network of some 2,000 bilateral double tax treaties. The double tax treaty is, in many ways, the roots of the international system of taxation. That system, however, is in upheaval in the face of globalization, technological advances, taxpayer abuse, and shifting political tides. In the academic literature, however, scrutiny of tax treaties is largely confined to the albeit important question of whether tax treaties are beneficial for developing countries. Surprisingly little consideration has been paid to whether developed countries, like the United States, should continue to sign tax treaties with one another, and no formal revenue or economic analyses of the treaties has been undertaken by the United States government. In fact, little evidence or theory exists to support entrance into tax treaties by the United States, and examination of investment flows indicates the treaties likely lose significant U.S. revenues. Additionally, they enable taxpayer abuse, stagnate domestic policy, and thwart reforms of the antiquated international tax system. These consequences are particularly problematic for the United States. Other nations, after all, have been able to supplement their revenues and pursue destination-based taxation through treaty-friendly VATs.

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January 23, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Columbia Journal Of Tax Law Publishes New Tax Matters: Will Tax Treaties and WTO Rules 'BEAT' the BEAT?

Columbia Journal of Tax Law LogoThe Columbia Journal of Tax Law has published a new issue of its Tax Matters feature, with short pieces responding to a specific cutting-edge tax law issue:

Section 59A of The Tax Cuts and Jobs Act of 2017 created the new Base Erosion and Anti-Avoidance Tax, which denies deductions for payment made to foreign related persons. The BEAT has created a number of issues with regards to its relationship with international treaties and obligations.

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January 23, 2019 in Scholarship, Tax | Permalink | Comments (0)

Tuesday, January 22, 2019

Stantcheva Presents Taxation And Innovation In The 20th Century Today At NYU

StanchevaStefanie Stantcheva (Harvard) presents Taxation and Innovation in the 20th Century (with Ufuk Akcigit (Chicago), John Grigsby (Chicago) & Tom Nicholas (Harvard)) at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

This paper studies the effect of corporate and personal taxes on innovation in the United States over the twentieth century. We use three new datasets: a panel of the universe of inventors who patent since 1920; a dataset of the employment, location and patents of firms active in R&D since 1921; and a historical state-level corporate tax database since 1900, which we link to an existing database on state-level personal income taxes. Our analysis focuses on the impact of taxes on individual inventors and firms (the micro level) and on states over time (the macro level).

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January 22, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Denying Tax-Exempt Status To Discriminatory Private Adoption Agencies

Allison M. Whelan (Covington & Burling, Washington D.C), Denying Tax-Exempt Status to Discriminatory Private Adoption Agencies, 8 UC Irvine L. Rev. 711 (2018):

This Article ... and argues that the established public policy at issue here is the best interests of the child, which includes the importance of ensuring that children have safe, permanent homes. In light of this established public policy, which all three branches of the federal government have recognized and support, this Article ultimately argues that, consistent with the holding in Bob Jones, private adoption agencies that refuse to facilitate adoptions by same-sex parents, thereby narrowing the pool of qualified prospective parents and reducing the number of children who are adopted, act contrary to the established public policy of acting in the best interests of the child.

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January 22, 2019 in Scholarship, Tax | Permalink | Comments (3)

Morrow: Noncompetes As Tax Evasion

Rebecca Morrow (Wake Forest), Noncompetes as Tax Evasion, 96 Wash. U. L. Rev. 265 (2018):

Al Capone famously boasted of his criminal empire: “Some call it bootlegging. Some call it racketeering. I call it a business.” Treasury Agent Frank Wilson and Prosecutor George Johnson put Capone behind bars not by disputing his characterization and pursuing murder or assault or RICO charges, but by accepting it and enforcing its tax implications. Irrespective of their legality, Capone’s businesses were profitable, and Capone had not reported their profits for tax purposes. A simple application of bedrock tax law achieved what other legal routes failed to achieve and sent Capone to Alcatraz. The trick was to see the tax argument.

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January 22, 2019 in Scholarship | Permalink | Comments (0)

Monday, January 21, 2019

Columbia Journal Of Tax Law Publishes New Issue

Columbia Journal of Tax Law LogoThe Columbia Journal of Tax Law has published Vol. 10, No. 1:

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January 21, 2019 in Scholarship, Tax | Permalink | Comments (0)

Spring 2019 Law Review Article Submission Guide

SubmissionsNancy Levit (UMKC) & Allen Rostron (UMKC) have updated their incredibly useful document, which contains two charts for the Spring 2019 submission season covering 202 law reviews.

The first chart (pp. 1-52) contains information gathered from the journals’ websites on:

  • Methods for submitting an article (such as by e-mail, ExpressO, regular mail, Scholastica, or Twitter)
  • Any special formatting requirements
  • How to request an expedited review
  • How to withdraw an article after it has been accepted for publication elsewhere

The second chart (pp. 53-59) contains the ranking of the law reviews and their schools under six measures:

  • U.S. News: Overall Rank
  • U.S. News: Peer Reputation Rating
  • U.S. News: Judge/Lawyer Reputation Rating
  • Washington & Lee Citation Ranking
  • Washington & Lee Impact Factor
  • Washington & Lee Combined Rating

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January 21, 2019 in Legal Education, Scholarship | Permalink | Comments (0)

Sunday, January 20, 2019

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 new papers debuting on the lit at #4 and #5:

  1. [370 Downloads]  Profit Shifting Before and After the Tax Cuts and Jobs Act, by Kimberly Clausing (Reed)
  2. [353 Downloads]  How Data Should (Not) Be Taxed, by Johannes Becker (University of Muenster), Joachim Englisch (University of Muenster) & Deborah Schanz (Ludwig Maximilian University of Munich)
  3. [230 Downloads]  The Proposed Section 163(j) Regulations, by David S, Miller, Sejin Park, Mani Kakkar & Sean Webb (Proskauer)
  4. [221 Downloads]  The Impact of Soda Taxes: Pass-through, Tax Avoidance, and Nutritional Effects, by Stephen Seiler (Stanford), Anna Tuchman (Northwestern) & Song Yao (Minnesota)
  5. [115 Downloads]  Cloudy with a Chance of Taxation, by Rifat Azam (Radzyner) & Orly Mazur (SMU) (review by Hayes Holderness (Richmond))

January 20, 2019 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, January 19, 2019

Ten Reasons To Prefer Tax Partnerships Over S-Corporations

Bradley T. Borden (Brooklyn), Ten Reasons to Prefer Tax Partnerships Over S-Corporations, N.Y. Bus. L.J. Vol. 22, No. 2, p 47, Winter 2018:

A fundamental choice for every business owner is the type of legal and tax entity the owner will use for the business. Because C-corporations are subject to an entity-level tax, owners of small businesses often face the choice of operating as an S-corporation or a tax partnership. To the uninitiated, the choice may appear to be trivial because both tax partnerships and S-corporations provide passthrough tax treatment (i.e., no entity-level tax). In fact, however, despite the passthrough nature of both tax partnerships and S-corporations, tax law treats them differently in many respects. This article identifies ten ways in which tax law treats the two types of tax entities differently, showing that in many situations, business owners will be better served by forming as tax partnerships. The article also identifies situations under which S-corporations provide the better tax alternative.

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

Friday, January 18, 2019

Weekly SSRN Tax Article Review And Roundup: Eyal-Cohen Reviews Hemel's The State-Charity Disparity Under The 2017 Tax Law

This week, Mirit Eyal-Cohen (Alabama) reviews Daniel Hemel (Chicago), The State-Charity Disparity Under the 2017 Tax Law, 58 Wash. U. J.L. & Pol'y ___ (2019).

Mirit-Cohen (2018)This Article is especially timely in light of continuous efforts by states (recently by Connecticut, New Jersey, New York, and Oregon) to create state tax credits for charitable contributions to public education or public health. These tax credits reduce the state tax liability for Federal purposes and might be helpful in alleviating the effect of the new cap on individual state and local tax (“SALT”) deductions imposed by the Tax Cuts and Jobs Act of 2017 (and was also part of the 2016 Clinton tax proposal). While the IRS has allowed in the past such charitable contributions as deductible for Federal purposes, Treasury recently proposed regulation to reverse this trend requiring taxpayers to decrease their charitable contribution deduction by the value of SALT benefits received for their contribution, with a “de minimis” rule ignoring state tax benefits worth less than 15% of the donation.

Hemel makes a case against the disparity in the limitations on charitable contributions (up to 60% of AGI) compared to those placed on SALT payments ($10,000 cap a year).  He provides several justifications for removing such differential tax treatment. First, he points out to the fact that both public charities and state and local governments are primarily in the business of providing education, health, and social services. But more so, in Hemel’s eyes, the fundamental reasons for supporting charities such as promoting pluralism, creating positive externalities, and delivering specified knowledge, are equally if not more present in the case of state and local government organizations. SALT can be seen as simply the price of goods and services that state and local governments provide. Accordingly, from a measurement-of-income perspective, Hemel suggests that SALT should represent costs of services only up to a point, after which they constitute a reduction in consumption plus savings. Indeed, today this is encompassed somewhat in the Standard Deduction and will continue to do so with its exponential recent increase in 2018. Taking Hemel’s implicit analogy a step forward could be providing a differentiated Standard Deduction at the Federal level, adjusted for each state for its value worth of services. Ignoring issues of valuation and political brawl, this could be an efficient way to coordinate more equitably the services (measured via local taxes) of each state to their Federal deductibility. 

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January 18, 2019 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Chodorow Presents The Parsonage Exemption Today At Florida

ChodorowAdam Chodorow (Arizona State) presents The Parsonage Exemption, 51 U.C. Davis L. Rev. 849 (2018), at Florida today as part of its Tax Colloquium Series:

The parsonage exemption allows “ministers of the gospel” to exclude the value of housing benefits from income, whether received in-kind or as a cash allowance. Critics argue that the provision violates the First Amendment’s Establishment Clause, while supporters contend that it does not single religion out for a cognizable benefit. Alternately, supporters claim that it is a permissible accommodation for religion under the First Amendment’s Free Exercise Clause. This Article fills an important gap in the debate by offering a nuanced explanation of how the parsonage exemption and other housing provisions function within the tax code.

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

Issues Taxing Cryptocurrency And The Policy Behind A Safe Harbor For Exchanges And Users

Stan Sater (Tulane), Issues Taxing Cryptocurrency and the Policy Behind a Safe Harbor for Exchanges and Users

The U.S. federal tax framework for virtual currency remains ambiguous. In the face of emerging technology, the IRS has taken a cautious approach using a “best guess” tax treatment until the technology is sufficiently mature. In particular, for this rapidly evolving ecosystem, a careful regulatory approach is prudent. Regulations that are hastily written have the chance of stifling innovation or force companies to seek jurisdiction elsewhere. However, legal ambiguity and uncertainty in this wait and see approach may have a negative impact on startup investment and impact individuals honestly using the technology.

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

Thursday, January 17, 2019

Lawsky Presents Form As Formalization Today At Duke

Lawsky (2017)Sarah Lawsky (Northwestern) presents Form as Formalization at Duke today as part of its Tax Policy Workshop Series hosted by Lawrence Zelenak:

There are, roughly speaking, two approaches to applying computing to law, which can be thought of as a bottom up approach and a top down approach. The bottom up approach uses large amounts of data in some way—to make predictions, for example. Machine learning is one such approach; neural nets are another. This is generally seen to be the approach with the most potential, the one that leads to the “data driven future” of legal practice. The “top down” approach would derive conclusions from the law itself, after making the law legible to the computer in some way, perhaps through hand-encoding, perhaps through natural language processing or some similar approach to read the actual text of a statute or regulation.

The top-down approach, also sometimes called computational law, is generally considered to have much less potential. But even those whose dismiss computational law point to one example of success in encoding the law: TurboTax and similar tax compliance programs. Thus one finds enthusiastic references to creating “TurboTax for police complaints,”“TurboTax for copyright,” “TurboTax for immigration,” and so forth.

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

Hayashi Presents Countercyclical Tax Bases Today At Indiana

Hayashi (2019)Andrew Hayashi (Virginia) presents Countercyclical Tax Bases at Indiana today as part of its Tax Policy Colloquium Series hosted by David Gamage:

Tax scholarship has tended to focus on the efficiency properties of different tax bases under assumptions about the macroeconomy that only sometimes hold, and has paid relatively little attention to how those bases operate in recessions. I show how different tax bases interact with household credit constraints and adjustment costs to either stabilize or aggravate economic shocks.

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

Holderness: Whither Substantial Nexus?

Hayes Holderness (Richmond), Whither Substantial Nexus?:

Hailed as a massive victory for coherence in defining the state tax jurisdiction standard of “substantial nexus,” the 2018 South Dakota v. Wayfair case fundamentally altered the state and local tax jurisprudence. However, the vagueness of the decision left the substantial nexus doctrine at a crossroads: it may wither away into meaningless platitudes or solidify into a coherent standard that meaningfully protects interstate commerce from undue state tax burdens. This Article guides the substantial nexus doctrine down the latter path by developing a robust theory of substantial nexus that focuses on the potential burden of tax compliance costs and explaining the substantial nexus standard that follows from that theory.

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

Is Texas v. U.S. Taxing for Obamacare?

Andrew L. Oringer (Hofstra), Is Texas v. U.S. Taxing for Obamacare?

We return to the land of the Fifth Circuit for a ruling by a Texas district court in Texas v. United States that the entirety of the Patient Protection and Affordable Care Act was rendered unconstitutional in its entirety by the Tax Cuts and Jobs Act of 2017. The ACA has survived two trips to the U.S. Supreme Court. Will it survive what looks to be a third?

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