Paul L. Caron
Dean



Friday, August 7, 2020

Weekly SSRN Tax Article Review And Roundup: Elkins Reviews McCaffery's The Property-Tax Bundle Of Rights

This week, David Elkins (Netanya) reviews a recently posted work by Edward J. McCaffery (USC), The Property-Tax Bundle of Rights:

Elkins (2018)

In a highly ambitious and extremely well-written article, Prof. McCaffery takes us on a fascinating journey through the concept of property in law and legal thought from Ancient Rome to the present day. He argues that the modern conception of property rights as embodying complete dominion over a thing, including the right to destroy it, is a nineteenth century aberration that stands in stark contradiction to the seventeenth and eighteenth century liberal tradition. He focuses particular attention on John Locke, the titular godfather of private property. Many have noted that Lockean property rights are considerably more limited than is often claimed, as Locke expressly conditioned an individual’s exclusive rights in what had originally been the common property of all humankind on one leaving for others “enough, and as good” as one takes for oneself. McCaffery takes a more unusual approach. He points out that according to Locke, once one has acquired exclusive rights in a thing, one is obligated to preserve that thing for the good of the community as a whole. Allowing one’s “own” fruit to rot is impermissible and punishable. 

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August 7, 2020 in David Elkins, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Thursday, August 6, 2020

Dean Presents A Constitutional Moment In Cross-Border Taxation Today At The Indiana/Leeds Summer Zoom Tax Workshop Series

6a00d8341c4eab53ef0240a4dfd996200d-250wiSteven Dean (NYU) presents A Constitutional Moment in Cross-Border Taxation today as part of the Indiana/Leeds Summer Zoom Tax Workshop Series hosted by Leandra Lederman (Indiana) and Leopoldo Parada (Leeds):

The Classification and Assignment Constitution has shaped cross-border policymaking for a century. Two global crises in quick succession have created both an opportunity and an urgent need to remake that material constitution, altering its substantive rules by transforming the processes that shape them. In tax, just as in trade and investment law, critics find “not a borderless market without states but a doubled world kept safe from mass demands for social justice and redistributive equality by the guardians of the economic constitution.” In order to rewrite the protective algorithm at the core of the Classification and Assignment Constitution to provide all states—and developing states in particular—with access to the revenues they desperately need, a more inclusive cast of constitutional actors must be empowered.

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August 6, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Aprill: Standards For Charitable Disaster Relief During A Pandemic

Ellen P. Aprill (Loyola-L.A.), Standards for Charitable Disaster Relief In the Time of Pandemic, 81 Exempt Org. Tax Rev. 395 (2020):

This short piece explains how exempt organizations currently face uncertainty about the standards for determining need for disaster relief, particularly in the time of a crisis, such as the current pandemic. The available IRS guidance is not any official document published in the Internal Revenue Bulletin, but only a Publication 3833, “Disaster Relief: Providing Assistance through Charitable Organizations.” This IRS publication states that organization must make an individualized, specific determination of need before giving such assistance. This piece argues that the IRS should issue official guidance for the COVID-19 crisis, modeled on that given in connection with the September 11 terrorist attacks.

After 9/11, the IRS issued a notice permitting charities to distribute funds so long as payments were made in good faith using objective standards. The IRS should do the same now. If it does not, Congress should act, as it also did after 9/11.

August 6, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Wednesday, August 5, 2020

Fleischer & Hemel: The Architecture Of A Basic Income

Miranda Perry Fleischer (San Diego) & Daniel Jacob Hemel (Chicago), The Architecture of a Basic Income, 87 U. Chi. L. Rev. 625 (2020) (reviewed by David Elkins (Netanya) here and Susan Morse (Texas) here):

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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August 5, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (3)

Taxation And Gender Equality Conference: Postponed

Following up on my previous post, Conference Announcement And Call For Contributions: Taxation And Gender Equality

Taxation and Gender Equality Conference: Postponed:

As the Organizers and members of the Academic Advisory Committee we regret to confirm what you probably assumed:  The Taxation and Gender Equality Conference and Research Roundtable that were to be held on September 14 and 15, 2020, in Washington, DC, have been postponed due to the travel and other risks brought on by the COVID-19 pandemic.  The Conference and Research Roundtable were to have explored the interaction between tax law and gender equality with the objective of shining a spotlight on gender issues in taxation and bringing consideration of gender impacts into mainstream discussions surrounding the enactment and administration of tax laws.  With the continued support of our sponsors, the Tax Policy Center, the American Tax Policy Institute, the American Bar Foundation, the Tax Section of the American Bar Association and the American College of Tax Counsel, we expect to hold the Conference in Fall 2021.  We will announce a date and venue once the public health crisis brought on by the pandemic has abated sufficiently to allow for safe travel and large in-person gatherings, and we will issue another Call for Papers at that time.

We thank all who submitted papers in response to our original Call for Papers and are endeavoring to provide virtual outlets for at least some of them. Please be on the lookout for further developments and thank you for your continuing support of this important project.

Organizers
Julie Divola (Pillsbury Winthrop Shaw Pittman and American Tax Policy Institute), Elaine Maag (Tax Policy Center), and Alice Abreu (Temple Center for Tax Law and Public Policy and American Tax Policy Institute)

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August 5, 2020 in Conferences, Scholarship, Tax, Tax Conferences, Tax Scholarship | Permalink | Comments (0)

Tuesday, August 4, 2020

Columbia Journal Of Tax Law Publishes New Issue

The Columbia Journal of Tax Law has published Vol. 11, No. 2 (Summer 2020):

August 4, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Infanti & Crawford: A Taxing Feminism

Anthony C. Infanti (Pittsburgh) & Bridget J. Crawford (Pace), A Taxing Feminism, in The Oxford Handbook of Feminism and Law in the United States (Deborah L. Brake (Pittsburgh), Martha Chamallas (Ohio State) & Verna Williams (Dean, Cincinnati) eds. 2021):

Feminist perspectives are not new to tax law. The first academic piece bringing a feminist perspective to bear on tax law dates to the early 1970s, when Grace Blumberg published Sexism in the Code: A Comparative Study of Income Taxation of Working Wives and Mothers. Contemporaneously, none other than Ruth Bader Ginsburg (along with her tax lawyer husband Marty Ginsburg) brought a feminist perspective to bear on tax law when she argued Moritz v. Commissioner before the Tenth Circuit Court of Appeals, as depicted in the movie On the Basis of Sex. Since then, numerous other contributions have been made to the tax literature identifying ways in which a feminist perspective might influence tax reform debates.

After sketching the rich history of feminist tax jurisprudence, this chapter reflects upon the historical intransigence of mainstream tax academics, legislators, and the public when it comes to recognizing tax law as something more than a form of applied economics with no relation to feminist (or, for that matter, any other “noneconomic”) concerns.

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August 4, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

U.S. Tax Systems Need Anti-Racist Restructuring

BlackTaxpayersMatterFollowing up on my previous post, Palma Joy Strand (Creighton) & Nicholas A. Mirkay (Hawaii), Racialized Tax Inequity: Wealth, Racism, and the U.S. System of Taxation, 15 Nw. J. L. & Soc. Pol’y 265 (2020):  Francine J. Lipman (UNLV), Nicholas A. Mirkay (Hawaii) & Palma Joy Strand (Creighton), U.S. Tax Systems Need Anti-Racist Restructuring, 168 Tax Notes Fed. 855 (Aug. 3, 2020):

#BlackTaxpayersMatter
The world has witnessed the brutal suffocation of George Floyd on a concrete sidewalk in Minneapolis. While this is but one more example of centuries of relentless violence against Black people, many are hoping that this tragic death might be a catalyst for meaningful change. Around the world, rallies, marches, and vigils have filled public spaces to call out institutional racism and demand systemic change. The rage, despair, exhaustion, and frustration with targeted discrimination has not only permeated cities and streets, but racism is being condemned at kitchen tables, by businesses, in social media, and from groups as sweeping as Sesame Street, KPop fans, and NASCAR. People across the globe are raising their voices and insisting that something be done to stop the routine ruin of Black lives.

Many are looking to Black leaders in every discipline, including finance, economics, and tax, and asking what they can do to help. And Black leaders — once again, after centuries of explaining, exposing, discussing, writing, speaking, preaching, demanding, and demonstrating that American institutions are implicitly and explicitly discriminatory and must fundamentally change — are providing thoughtful, cogent answers. They rise to the challenge again and again, hoping that this horrific racist episode will be different from countless previous episodes. They call for a transcendent time of tangible change. However, they are rightfully saying that this is not their burden to bear, and that those with the privileged status of race, income, wealth, and platforms must step up, move forward, and finally do something. We have heard from many of our Black and brown colleagues that they are “sick and tired of being sick and tired.”

As writers, we understand the power of words. But it is also true that actions speak louder than words. As Maya Angelou said so poetically, “When someone shows you who they are, believe them the first time.” (Emphasis added.) What can we as tax professionals, scholars, and advocates do to show our commitment to racial justice?

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August 4, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (6)

Monday, August 3, 2020

Lesson From The Tax Court: You Get What You Pay For

Tax Court (2020)It’s sweet to beat the IRS.  It’s even sweeter to make the government pay your costs.  The taxpayers in Gary M. Dennis and Sharon D. Dennis v. Commissioner, T.C. Memo. 2020-98 (July 1, 2020) (Judge Panuthos) learned the sad lesson that victorious taxpayers won’t receive an award of costs and fees under §7430 when their only cost was their time and labor.  Details below the fold.

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August 3, 2020 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (0)

Sunday, August 2, 2020

The Top Five New Tax Papers

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

  1. SSRN Logo (2018)[511 Downloads]  The Legality of Digital Taxes in Europe, by Ruth Mason (Virginia) & Leopoldo Parada (Leeds)
  2. [422 Downloads]  Policy Options for Taxing the Rich, by Lily Batchelder (NYU) & David Kamin (NYU)
  3. [315 Downloads]  Rethinking Tax for the Digital Economy After COVID-19, by Tarcisio Diniz Magalhaes (McGill) & Allison Christians (McGill) (reviewed by Young Ran (Christine) Kim (Utah) here)
  4. [278 Downloads]  Deeming Fictions in the Context of Tax Treaties — Analyzing Arguments in HMRC v. Fowler, by Dhruv Sanghavi (Maastricht)
  5. [171 Downloads]  The Effect of U.S. Tax Reform on the Tax Burdens of U.S. Domestic and Multinational Corporations, by Scott Dyreng (Duke), Fabio Gaertner (Wisconsin), Jeffrey Hoopes (North Carolina) & Mary Vernon (Wisconsin)

August 2, 2020 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink | Comments (0)

Friday, July 31, 2020

Weekly SSRN Tax Article Review And Roundup: Speck Reviews Business Loss Deductions And The Pandemic

This week, Sloan Speck (Colorado) reviews new works by Steven Hodaszy (Robert Morris), Why the Antipathy Toward Business Loss Deductions Is Misguided, 167 Tax Notes Fed. 1863 (Jun. 15, 2020), and Clint Wallace (South Carolina), The Troubling Case of the Unlimited Pass-Through Deduction, 87 U. Chi. L. Rev. Online (2020).

Speck (2017)

On July 27, Senate Republicans released their proposal for the next pre-election round of pandemic stimulus legislation. The HEALS Act, which comprises eight smaller bills, represents the Republican response to the House Democrats’ HEROES Act, which passed the lower chamber in mid-May. The differences between these two legislative projects are legion. One such difference involves the “excess business loss” rules in § 461(l)—a matter of particular concern to certain taxpayers, lobbyists, affinity groups, and their elected representatives, as well as recent scholarly work by Steven Hodaszy and Clint Wallace.

The next two paragraphs offer a brief synopsis of § 461(l), omitting most of the social and political context but including many of the eye-glazing technical bits. In December 2017, the legislation known as the Tax Cuts and Jobs Act added § 461(l) to the Internal Revenue Code, presumably as a revenue offset for a miniscule portion of the law’s mammoth tax cuts. As enacted, § 461(l) disallowed certain single-year business losses that exceeded $250,000 or $500,000 for single individuals and joint filers, respectively. This limitation applied after the passive activity loss rules in § 469 and the at-risk rules in § 465, and any excess loss was rolled into subsequent years’ net operating loss carryforwards under § 172, as modified by the TCJA. Two items of note: this version of § 461(l) applied to a relatively small number of relatively well-off taxpayers, and a number of commentators interpreted § 461(l) as targeting the real estate sector.

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July 31, 2020 in Scholarship, Sloan Speck, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Property Tax Deferral: Can a Public/Private Partnership Help Provide Lifetime Income?

Alicia H. Munnell, Wenliang Hou & Abigail Walters (Boston College), Property Tax Deferral: Can a Public/Private Partnership Help Provide Lifetime Income?:

Many retirees will not have enough money from conventional retirement programs to maintain their standard of living once they stop working. To help support themselves, they will need to tap their home equity, the major asset for most middle-income older households. Yet tapping home equity is difficult: most people are reluctant to downsize and, even when they do, they rarely reduce their housing expenses. Reverse mortgages are an option, but most households are put off by the enormity of the decision, the complexity of the product, and the high up-front costs. A statewide property tax deferral program overcomes the hurdles to accessing home equity.

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July 31, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Thursday, July 30, 2020

García Antón Presents Enhancing The Group Interest In Transfer Pricing Analysis Today At The Indiana/Leeds Summer Zoom Tax Workshop Series

Ricardo García Antón (Tilburg) presents EnEdpIUSVWAAA6gavhancing the Group Interest in Transfer Pricing Analysis today as part of the Indiana/Leeds Summer Zoom Tax Workshop Series hosted by Leandra Lederman (Indiana) and Leopoldo Parada (Leeds):

The fact that the arm´s length principle is anchored in the separate entity principle yields a transfer analysis, which almost neglects the integrated economic reality of the group of companies. While tax law builds up this fiction of related companies acting as if they were standalone companies, corporate law has been conversely more responsive to the economic reality of the group. Such integrated economic reality in the groups of companies requires a specific answer of the tax law, rather than simply ignoring the power dynamics under the separate legal entity principle. The need to reframe the arm’s length standard to match the group dynamics becomes now urgent under the new profit allocation rules derived from the OECD Unified Approach, which allocates the deemed residual profit taking into account the group as a whole.

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July 30, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

The Tax Lawyer Publishes New Issue

The Tax Lawyer has published Vol. 73, No. 4 (Summer 2020):

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July 30, 2020 in ABA Tax Section, Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Why The Antipathy Toward Business Loss Deductions Is Misguided

Steven Z. Hodaszy (Robert Morris University), Why the Antipathy Toward Business Loss Deductions is Misguided, 167 Tax Notes Fed. 1863 (June 15, 2020):

In 2017, the Tax Cuts and Jobs Act added — in section 461(l) — a new limitation on an individual business owner’s ability to deduct business losses against non-business income for tax years beginning between 2018 and 2025. In March 2020, Congress temporarily suspended the operation of section 461(l) as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Almost immediately thereafter, there began a push—by commentators in the press and academia, and by some members of Congress — to reinstate section 461(l) and to make the rule permanent. Now, the proposed reinstatement of the rule is part of the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, which passed the House in May 2020.

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July 30, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Wednesday, July 29, 2020

How America Was Tricked On Tax Policy

Bret Bogenschneider (Indiana University East), How America was Tricked on Tax Policy (Anthem Press 2020):

Tricked 3How America was Tricked on Tax Policy explains how regular citizens were “tricked” by the outdated view of economists that much heavier taxation of labor rather than capital is economically justifiable. The truth is that workers pay their taxes while the rich pay very little.  Based on reputable sources of information, including the publications of the Organization for Economic Cooperation and Development (OECD), official statistics data, and the publications in high-ranked journals, the book paves the way for a new policy making process aimed to achieve more sustainable taxation and to increase the wellbeing of citizens as the main goal of any modern state policy.

Dealing with critically important and underexplored topics in tax policy, the book challenges an enshrined dogma that is rarely challenged at the level of policy. In doing so, this book envisions policy changes that could be highly impactful in a new political administration. This book proposes that governments should look for not just corporate income tax rate reduction when announcing their tax reforms but should equally focus on the reduction of the overall tax burden on labor. The negative impact and high social cost of wage taxation is exemplified by the key areas of tax policy that are relevant for every wealthy state, such as taking due care of public health, investing in education and wellbeing of children, and supporting small business for the overall benefit to society.

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July 29, 2020 in Book Club, Scholarship, Tax, Tax Scholarship | Permalink | Comments (8)

Mann: I Robot, U Tax? The Tax Policy Implications Of Automation

Roberta Mann (Oregon), I Robot: U Tax? Considering the Tax Policy Implications of Automation, 64 McGill L.J. 1 (2019):

I RobotIn a 2017 interview, Microsoft founder Bill Gates recommended taxing robots to slow the pace of automation. Funds raised could be used to retrain and financially support displaced workers. Up to 47 percent of U.S. jobs are at risk by advancements in artificial intelligence. Low-wage workers currently hold a majority of those at-risk jobs. Increased automation is likely to exacerbate income inequality.

While employment changes due to automation are not new, advances in artificial intelligence threaten many more jobs much more quickly than historic automation did. Accelerated automation presents two problems: a revenue problem and a human problem. The revenue problem exists because the tax system is designed to tax labor more heavily, as labor is less likely to be able to avoid taxation. Capital investment, on the other hand, is taxed more lightly because capital is mobile and can escape taxation. When capital becomes labor, as in automation, the bottom falls out of the system. The human problem is first that most people need income from working to survive. Some scholars have advocated for a governmentally provided universal basic income (UBI). Taxing robots could in theory provide revenue for a UBI, although any source of revenue would work just as well. While this would solve the survival problem, humans need more than basic survival. In his classic work, psychologist Abraham Maslow put survival at the bottom of his hierarchy of needs. Work satisfies the higher order needs of social identity and self-esteem.

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July 29, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Tuesday, July 28, 2020

Tax Law Review Publishes New Issue

The Tax Law Review has published a new issue (Vol. 72, No. 1 (Fall 2018)):

July 28, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Mitchell Kane Replaces Deborah Schenk As Tax Law Review Editor-In-Chief, Will Publish 2 Issues/Year Rather Than 4

Mitchell A. Kane (NYU), Foreword, 72 Tax L. Rev. vii (2018):

Tax Law ReviewIt is my great privilege to assume the position of editor in chief of the Tax Law Review beginning with this issue. ... The current reputation of the Tax Law Review can essentially be credited to a single person-my predecessor, Professor Deborah Schenk, Ronald and Marilynn Grossman Professor of Taxation Emerita. I do not think I am overstepping bounds if I venture here to speak not only for myself but also on behalf of my tax law colleagues at NYU Law, and indeed on behalf of the entire tax legal academy, in thanking Professor Schenk for her brilliant leadership of the journal over the past many years. How many years? Interestingly, I asked a reference librarian at NYU Law to find the answer to that question, so I could note it here. The answer appears to be, "more years than one can easily count," as Professor Schenk's editorship was so long running that it predates the time when a masthead first appeared in the journal. In a construction that might appeal to tax lawyers, we can safely say that the period of Professor Schenk's editorship was "not less than thirty years." ... Professor Schenk edited more than 100 issues of the journal during her tenure. In honor of Professor Schenk's contributions, we will be publishing a tribute to her, scheduled to appear in Volume 73.

My chief goal moving forward is to live up to the very high standards that Professor Schenk has set for the journal. Within those bounds I have adopted a few changes to the editorial model.

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July 28, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Fox & Liscow: A Case For Higher Corporate Tax Rates

Edward G. Fox (Michigan) & Zachary D. Liscow (Yale), A Case for Higher Corporate Tax Rates, 167 Tax Notes Fed. 2021 (June 22, 2020):

In this report, Fox and Liscow argue that, while conventional wisdom holds that we should lower taxes on corporations because of international competition, two recent changes militate in favor of higher corporate taxes, which would close the deficit, fund social programs, and reduce inequality. First, changes in tax law have increasingly targeted the corporate tax at economic “rents,” the supersized returns that businesses receive when they enjoy advantages like market power. Because taxing rents is progressive and does little to harm economic activity, a higher rate is justified. Second, shifts in the American economy have allowed companies to earn more economic rents, increasing the revenue a tax on rents could raise — and increasing the appeal of the tax as a deterrent to harmful behaviors like lobbying government officials to get or maintain market power.

Although the authors cannot say exactly what the corporate rate should be, principally because the international dimension remains so important, they offer reasons to favor a higher rate and describe reforms that could help ease the adoption of higher, but still efficient, taxes on corporate returns. Fox and Liscow suggest that, at minimum, proponents of lower corporate tax rates present an incomplete picture and that the “lower corporate tax rates” conclusion is a nonobvious one.

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July 28, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (2)

Monday, July 27, 2020

Blank & Glogower: Progressive Tax Procedure

Joshua D. Blank (UC-Irvine) & Ari D. Glogower (Ohio State), Progressive Tax Procedure, 96 N.Y.U. L. Rev. ___ (2021):

Abusive tax avoidance and tax evasion by high-income taxpayers pose unique threats to the tax system. These strategies undermine the tax system’s progressive features and distort its distributional burdens. Responses to this challenge generally fall within two categories: calls to increase IRS enforcement and “activity-based rules” targeting the specific strategies that enable tax avoidance and evasion by these taxpayers. Both of these responses, however, offer incomplete solutions to the problems of high-end noncompliance.

This Article presents the case for “progressive tax procedure”— means-based adjustments to the tax procedure rules for high-income taxpayers. In contrast to the activity-based rules in current law, progressive tax procedure would tailor rules to the economic circumstances of the actors rather than their activities. For example, under this system, a high-income taxpayer would face higher tax penalty rates or longer periods where the IRS could assess tax deficiencies. Progressive tax procedure could also allow an exception for low-value tax underpayments, to avoid excessive IRS scrutiny or unduly burdensome rules for less serious offenses.

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July 27, 2020 in Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (0)

Lesson From The Tax Court: The CDP Consequences Of A Failure To Communicate

Cool Hand LukeIn the movie Cool Hand Luke, the consequences of an alleged failure to communicate fell on the prisoner Paul Newman.  Here’s the clip.  It was a meme before memes were memes.  Last week, the Tax Court decided the consequences of a failure to communicate will fall on IRS.

The lesson is on the meaning of the word “opportunity” in §6330(c)(2)(B), which allows taxpayers to contest the merits of an assessed tax liability in a CDP hearing if they did not “otherwise have an opportunity to dispute such tax liability” before the assessment.

In Rickey B. Barnhill v. Commissioner, 155 T.C. No. 1 (July 21, 2020) (Judge Gustafson) the Court held that mere receipt of Letter 1153—giving the taxpayer a pre-assessment opportunity to contest a proposed Trust Fund Recovery Penalty—would not automatically prevent a taxpayer from contesting the merits of that liability in a later CDP hearing.  As a result, so long as the taxpayer alleges a failure to communicate during the pre-assessment administrative hearing, the question of who was at fault for failure must be decided by trial, at which the IRS would have the burden to prove it was not at fault.

While the case will not likely become a movie, or even a gif, it is an important decision to know about.  It seems to give taxpayers a potentially explosive expansion of their CDP rights.

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July 27, 2020 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (0)

Sunday, July 26, 2020

The Top Five New Tax Papers

There is quite a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with new papers debuting on the list at #2 and #3:

  1. SSRN Logo (2018)[475 Downloads]  The Legality of Digital Taxes in Europe, by Ruth Mason (Virginia) & Leopoldo Parada (Leeds)
  2. [404 Downloads]  Policy Options for Taxing the Rich, by Lily Batchelder (NYU) & David Kamin (NYU)
  3. [293 Downloads]  Rethinking Tax for the Digital Economy After COVID-19, by Tarcisio Diniz Magalhaes (McGill) & Allison Christians (McGill) (reviewed by Young Ran (Christine) Kim (Utah) here)
  4. [256 Downloads]  Deeming Fictions in the Context of Tax Treaties — Analyzing Arguments in HMRC v. Fowler, by Dhruv Sanghavi (Maastricht)
  5. [168 Downloads]  What Are Minimum Taxes, and Why Might One Favor or Disfavor Them?, by Daniel Shaviro (NYU)

July 26, 2020 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink | Comments (0)

Saturday, July 25, 2020

The Effect Of U.S. Tax Reform On The Tax Burdens of U.S. Public Corporations

Scott Dyreng (Duke), Fabio Gaertner (Wisconsin), Jeffrey Hoopes (North Carolina) & Mary Vernon (Wisconsin), The Effect of U.S. Tax Reform on the Tax Burdens of U.S. Domestic and Multinational Corporations:

We quantify the net effect of recent U.S. tax reform on the tax rates of public U.S. corporations and find they decreased by 7.5 to 11.4 percentage points on average following tax reform. Further, we separately examine the effect of tax reform on purely domestic firms and multinational firms because some key provisions only affect multinational firms. We find both sets of firms benefited from tax reform, although domestics benefited the most. We also find the entirety of multinational tax savings stemmed from tax savings on their domestic operations, not as a result of more favorable taxation of international income. We also find no changes in the federal tax burden on foreign income for firms most likely to be subject to the new anti-abuse provisions. Overall, our findings suggest that despite the recent overhaul in international taxation, the federal tax burden on the foreign earnings of U.S. corporations appears to have been largely unaffected.

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July 25, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Friday, July 24, 2020

Weekly SSRN Tax Article Review And Roundup: Holderness Reviews Mitigating Housing Instability During A Pandemic

This week, Hayes Holderness (Richmond) reviews Michelle D. Layser (Illinois), Edward De Barbieri (Albany), Andrew Greenlee (Illinois), Tracy Kaye (Seton Hall), & Blaine G. Saito (Northeastern), Mitigating Housing Instability During a Pandemic:

Holderness (2017)The COVID-19 pandemic continues to wreak havoc on people’s lives, both from a health perspective and an economic perspective. Congress is currently considering additional federal relief packages to support individuals across the country, and states and localities also weigh how they can help their people. Many have found these government responses lacking so far, and Michelle Layser, Ted De Barbieri, Andrew Greenlee, Tracy Kaye, and Blaine Saito add an important and powerful critique in their draft article: Not enough attention has been paid to housing instability (a particularly salient critique to yours truly, whose hometown carries the ignominious rank of second most evicting large city in the country). Policymakers would be wise to learn from the authors’ analysis and heed their advice.

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July 24, 2020 in Hayes Holderness, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (1)

Thursday, July 23, 2020

Dourado Presents The Digital Economy And Tax Policy Today At The Indiana/Leeds Summer Zoom Tax Workshop Series

Ana-paula-douradoAna Paula Dourado (Lisbon) presents The Concept of Digital Economy for Tax Purposes: A Reassessment today as part of the Indiana/Leeds Summer Zoom Tax Workshop Series hosted by Leandra Lederman (Indiana) and Leopoldo Parada (Leeds):

In this paper, I will start by discussing the meaning of the digital revolution and its consequences for state sovereignty. I will then analyse the three major factors that govern the current tax policy discussion about the digital economy, in order of importance: (1) the evolution of the digital economy and its business models—or even better, essentially how the OECD described these models; (2) fair allocation of taxing rights; and (3) the internet model and approach to data protection, taking into account the knowledge discovery and data mining (KDDM) business model.

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July 23, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

McMillan: Noncharitable Nonprofit Organizations And Tax Policy — Working Toward A Public Benefit Theory

Lori A. McMillan (Washburn), Noncharitable Nonprofit Organizations and Tax Policy: Working Toward a Public Benefit Theory, 59 Washburn L.J. 301 (2020):

Noncharitable Nonprofits in Canada are exempt from federal income tax, but are subjected to little scrutiny to qualify for this exemption. The tax policy behind this exemption is explored in this paper, trying to determine what should underpin the exemption for these types of organization.

July 23, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Wednesday, July 22, 2020

Columbia Journal Of Tax Law Publishes Tax Matters: The New § 245A Temporary Regulations

The Columbia Journal of Tax Law has published a new issue of its Tax Matters feature:

Columbia Journal of Tax Law Logo (2020)Kristin E. Hickman (Minnesota), 245A and T.D. 9865: Two Steps Forward, One Step Back for Temporary Treasury Regulations?:

In June 2019, the Treasury Department (Treasury) adopted temporary regulations implementing the new § 245A, enacted by Congress as part of the Tax Cuts and Jobs Act (TCJA). Procedurally, the § 245A temporary regulations are unique as the first and only post-TCJA regulations to date (1) to be issued by Treasury in temporary form and (2) to invoke the good cause exception, including an extended explanation of Treasury’s reasons for doing so.

Kandyce Korotky (Covington & Burling, Washington; D.C.), Two Steps Forward, Two Steps Back? Good Cause and the Section 245A Temporary Regulations

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July 22, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Tuesday, July 21, 2020

Columbia Journal Of Tax Law Publishes New Issue

The Columbia Journal of Tax Law has published Vol. 11, No. 1 (Winter 2019):

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July 21, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Usage Of The Corporate Tax Provisions Of The CARES Act: Evidence From SEC Filings

John Gallemore (Chicago), Stephan Hollander (Tilburg) & Martin Jacob (WHU), Who CARES? Evidence on the Corporate Tax Provisions of the Coronavirus Aid, Relief, and Economic Security Act from SEC Filings:

We use U.S. Securities and Exchange Commission (SEC) filings to provide initial large-sample evidence regarding utilization of corporate tax provisions by U.S. firms under the Coronavirus Aid, Relief, and Economic Security Act (CARES). These tax provisions were intended to provide firms immediate liquidity to prevent widespread bankruptcies and layoffs in response to the COVID-19 pandemic. However, critics have argued that the provisions were poorly targeted and amounted to “giveaways” for shareholders of large corporations. We find that 38 percent of firms discuss at least one of the CARES tax provisions in their SEC filings, a result primarily attributable to the net operating loss (NOL) carryback provision.

Cares 1

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July 21, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Mandatory Disclosure And Nonprofit Fundraising

Putnam Barber (University of Washington), Megan Farwell (Pennsylvania) &  Brian D. Galle (Georgetown), Does Mandatory Disclosure Matter? The Case of Nonprofit Fundraising:

Do small-dollar donors seek out potentially adverse information about organizations making fundraising appeals? Do they react when it is readily available? Do they draw negative inferences when critical information is not available? To answer these questions, we consider previously unexamined large-scale natural experiments involving US charitable organizations — tax-exempt organizations that file IRS Form 990.

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July 21, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Monday, July 20, 2020

Morse Reviews Gergen's Taxing Global Capital

Jotwell (Tax) (2016)Susan Morse (Texas), Raising Revenue by Taxing Capital (JOTWELL) (reviewing Mark Gergen (UC-Berkeley), A Securities Tax and the Problems of Taxing Global Capital):

The federal government’s spending to try to contain the economic fallout from the COVID-19 pandemic already approaches $3 trillion. It will cause U.S. national debt to exceed GDP for the first time since World War II. The current crisis has emphasized deep distributive justice concerns and raised calls for more public spending to help address them. Such public spending is important and necessary, but there is a question of how to pay for it. Taxing wealth and capital income can be part of the solution. These are systematically undertaxed, even though careful analysis demonstrates that wealth taxation would not create an unacceptable drag on the economy.

Within the broad wealth and capital income tax literature, Mark Gergen’s work offers a particularly clever and tidy approach to taxing capital. He proposes a securities tax to reach capital touched by the public market. This tax would be collected and remitted by market participants like public corporations. A complementary tax on imputed normal returns would reach private capital. Gergen recently posted A Securities Tax and the Problems of Taxing Global Capital, which describes international issues raised by his proposal. This paper follows on a 2016 article, How to Tax Capital, which covers the fundamentals of his idea. ...

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July 20, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (1)

Lesson From The Tax Court: How Evil §481 Forces Income Recapture

Tax Court (2017)I have always struggled with basis.  In the 1990’s I rented out a 1-Bedroom condo.  When my 1995 return was picked up for audit, a kindly revenue agent pointed out that one needs to exclude the proportionate value of land from depreciation, even for a condo.  Who knew?  The excess depreciation I had taken in the audited year was disallowed, resulting in increased gross income.  But the agent did not make me recapture in the audit year the excess depreciation I had taken in prior years, some of which were closed.  I would account for that, the agent explained, when I sold the condo.  I looked up §1016 and, sure enough, one must adjust basis by the greater of depreciation allowed (actually taken) or allowable (what you shudda taken).  Lesson learned.

The unhappy taxpayers in Gary Pinkston and Janice Pinkston, T.C. Memo. 2020-44 (April 13, 2020)(Judge Lauber) learned a harsher lesson: they may have to recapture over $1.1 million of prior years’ excess depreciation as gross income in the year of audit.  That is because §481 sometimes forces taxpayers to recapture income in the audit year that was improperly omitted in prior years.  You can find the sad details on how that works below the fold. 

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July 20, 2020 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (7)

Sunday, July 19, 2020

The Top Five New Tax Papers

There is quite a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with new papers debuting on the list at #3 and #4:

  1. SSRN Logo (2018)[383 Downloads]  The Legality of Digital Taxes in Europe, by Ruth Mason (Virginia) & Leopoldo Parada (Leeds)
  2. [208 Downloads]  Deeming Fictions in the Context of Tax Treaties — Analyzing Arguments in HMRC v. Fowler, by Dhruv Sanghavi (Maastricht)
  3. [151 Downloads]  What Are Minimum Taxes, and Why Might One Favor or Disfavor Them?, by Daniel Shaviro (NYU)
  4. [147 Downloads]  Property Taxes and Dynamic Inefficiency: A Correction of a 'Correction', by Martin Hellwig (Max Planck)
  5. [135 Downloads]  Are Two Employers Better than One? An Empirical Assessment of Multiple-Employer Retirement Plans, by Natalya Shnitser (Boston College)

July 19, 2020 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink | Comments (0)

Friday, July 17, 2020

Luke: Continuity As The Key To Reform Of Section 355

Charlene D. Luke (Florida), Continuity as the Key to Reform of Section 355, 69 Am. U. L. Rev. F. 39 (2019):

There can be little doubt that Internal Revenue Code (Code) section 355 is overly complex; the piecemeal adjustments spanning multiple decades could serve as exemplars of the potential pitfalls of incremental reform. Revisions to section 355 have tended to be under- or over-inclusive because they are reactive to particular deals, yet they leave largely intact older structures that dealt with different deals. The result is a jumble of provisions that fail to implement a coherent, principled approach to the tax treatment of corporate divisions. In Reform of Section 355, Bret Wells urges changing Code section 355 to focus on the continuity of historic shareholders and historic assets [Reform of Section 355, 68 Am. U. L. Rev. 447 (2018)]. The proposals Wells suggests are grounded in congressional intent, specifically the rise and fall of the General Utilities doctrine and its role in the taxation of corporate divisions.

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July 17, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Batchelder & Kamin: Policy Options For Taxing The Rich

Lily L. Batchelder (NYU) & David Kamin (NYU), Policy Options for Taxing the Rich, in Maintaining the Strength of American Capitalism (Melissa Kearney & Amy Ganz eds., The Aspen Institute 2019):

The U.S. economy exhibits high inequality and low economic mobility across generations relative to other high-income countries.

BK1

The United States will need to raise more revenues in order to reduce these disparities, finance much-needed new services and investments, and address the nation’s long-term fiscal needs. This paper outlines policy options for raising a large amount of revenues primarily from the most affluent, first discussing potential incremental reforms and then focusing on four main options for more structural reform: dramatically increasing the top tax rates on labor and other ordinary income; effectively taxing the wealthy on accrued gains as they arise and at ordinary rates; a wealth tax on high-net-worth individuals; and a financial transactions tax.

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July 17, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (4)

Thursday, July 16, 2020

Devereux Presents The OECD Global Anti-Base Erosion Proposal Today At The Indiana/Leeds Summer Zoom Tax Workshop Series

DevereuxMichael Devereux (Oxford) presents The OECD Global Anti-Base Erosion Proposal: An Evaluation (with  François Bares, Sarah Clifford, Judith Freedman, İrem Güçeri, Martin McCarthy, Martin Simmler & John Vella (Oxford)) today as part of the Indiana/Leeds Summer Zoom Tax Workshop Series hosted by Leandra Lederman (Indiana) and Leopoldo Parada (Leeds):

The OECD’s “Global Anti-Base Erosion” (GloBE) proposal was formally introduced in January 2019 as part of a consultation on “Addressing the Tax Challenges of the Digitalisation of the Economy” (OECD, 2019a). It is currently being considered by the members of the Inclusive Framework, who are commited to reach an agreement on a consensus-based solution by the end of 2020 (OECD, 2020). While the proposal arose in the context of the debate about taxing digital businesses, it clearly has broader ambitions and, indeed, a broader scope – it targets the system for taxing business profit in an international tax setting as a whole.

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July 16, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Gergen: Stateless Dynastic Wealth And China

Mark P. Gergen (UC-Berkeley), The Possibility for Stateless Dynastic Wealth and the Case of China:

Part I of this paper explains how wealth managers have modified the trust to create the possibility for stateless dynastic wealth. By this I mean wealth that is held by a family through a trust that is established in a haven state to eliminate the power of other states to regulate and oversee transmission and management of wealth and to make it very difficult for courts in another state to levy against wealth on behalf of private creditors. These structures also permit legal tax avoidance if income and wealth is not attributed to family members. And they facilitate tax evasion by not reporting foreign income and wealth. I use the relatively novel structure of a perpetual purpose trust to illustrate.

Part II is a case study of China.

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July 16, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Wednesday, July 15, 2020

Avi-Yonah:  Antitrust And The Corporate Tax

Reuven S. Avi-Yonah (Michigan), Antitrust and the Corporate Tax, 1909–1928:

Between the Sherman Antitrust Act of 1890 and the Clayton Antitrust Act of 1914, the question of what to do about “trusts” dominated American political life. Before 1889, the dominant form of amalgamating competing businesses was the trust, because corporations could not hold shares in other corporations, and instead the shareholders would exchange their shares for trust certificates. But in 1889 New Jersey (the “traitor state”, according to muckraking journalist Lincoln Steffens) changed its corporate law to allow for holding company structures, setting of a great wave of amalgamations in areas like oil, tobacco, sugar and steel.

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July 15, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Women Business Owners And Tax Reform

Caroline Bruckner (American University, Kogod School of Business), Doubling Down on a Billion Dollar Blind Spot: Women Business Owners and Tax Reform, 9 Am. U. L. Rev. 47 (2020):

In 1972, the U.S. Census Bureau began tracking the total number of women-owned firms and found women owned only 4.6 percent of all U.S. firms. Since then, the total number of women-owned firms (defined as 51 percent or more as owned by women) has grown exponentially to represent 42 percent of all U.S. firms in 2019. During this period, Congress has supported women’s business ownership by passing legislation designed to eliminate discriminatory lending practices and promote federal contracting and counseling opportunities for women business owners. At the same time, Congress has regularly worked to enhance the U.S. Internal Revenue Code to benefit small businesses on a number of fronts. Most recently, in December 2017, Congress passed major tax reform legislation (commonly referred to as the “Tax Cuts and Jobs Act” or “TCJA”) to provide tax relief for businesses and families. The initial estimated cost to taxpayers was substantial and projected to increase federal deficits by more than $1.8 trillion from 2018-2027.

However, at no point prior to the TCJA did the Congressional tax writing committees consider whether this would be money well spent when it comes to women business owners (“WBOs”). This is problematic because while women-owned firms have grown to more than 40 percent of all U.S. firms, the majority are small businesses operating in service industries and continue to face challenges growing their receipts and accessing capital. The challenges that WBOs face are not new and Congress had the opportunity to consider them in connection with the 2017 TCJA debate. It failed to do so.

This article considers Congress’ efforts to spur economic growth through the TCJA with respect to WBOs and finds that Congress effectively doubled-down on the billion dollar blind spot it has with respect to WBOs and tax expenditures targeted to small businesses.

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July 15, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Tuesday, July 14, 2020

Hasen Presents Debt And Taxes Virtually Today At Florida

David Hasen (Florida) presents Debt And Taxes at Florida today as part of its Summer 2020 Virtual Faculty Workshop Series:

Hasen (2020)The federal income tax conceptualizes loans as an exchange of cash for promises to pay interest and to repay the cash by the term. This formulation is subtly wrong and has resulted in a weaker foundation for the existing rules, which are mostly correct, than they in fact enjoy. Conceptualizing loans as closely akin to rental arrangements places the existing rules on sounder conceptual footing. One exception, however, to the support for current law that the loan-as-rent arrangement provides is in the area of partnership tax. If loans are like cash rentals, the payment of interest is what supports both the borrower’s non-inclusion of loan proceeds and the borrower’s basis credit for them. Consistent with the loan-as-rent formulation, Treasury should provide for allocation of basis credit among partners for the partnership’s recourse debt based on who pays interest, not under the “catastrophe theory” of the current regulations.

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July 14, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Monday, July 13, 2020

Gergen: A Securities Tax And The Problems of Taxing Global Capital

Mark P. Gergen (UC-Berkeley), A Securities Tax and the Problems of Taxing Global Capital:

An earlier paper, How to Tax Capital, 70 Tax L. Rev. 1 (2016), proposed a new approach to taxing capital owned by U.S. households and nonprofits. The cornerstone is a flat periodic tax on the market value of U.S. publicly traded securities. An annual tax rate of around .8 percent (80 basis points) would roughly approximate the average tax burden on capital income in the U.S. under the existing patchwork system for taxing capital income. A security issuer would remit the tax based on the market value of its securities. A security issuer would receive a credit for U.S. publicly traded securities it holds so that wealth that is represented by a string of publicly traded securities would be taxed once. Wealth held in forms other than publicly traded securities (e.g, private equity and closely held companies) would be taxed by a complementary tax at the same rate on their estimated value. The earlier paper explained why the securities tax is superior to the individual income tax and the corporate income tax as a tax on capital. It eliminates most distortions created by the existing system, it is easy to administer, and it is impossible to evade other than by holding wealth in illiquid forms (which is costly).

This paper examines how the securities tax would function in a global context assuming that other nations do not change their approach to taxing cross-border investment.

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July 13, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Lesson From The Tax Court: The #1 Habit Of Highly Successful Taxpayers

CoveyIn Michael K. Simpson and Cynthia R. Simpson v. Commissioner, T.C. Memo. 2020-100 (July 7, 2020) (Judge Buch) the hapless taxpayers — devotee’s of Stephen Covey’s 7 Habits of Highly Effective People — not only failed to separate personal from business expenses, they also confused entity returns and personal returns.  The case is an object lesson on the importance of taxpayers properly accounting for business expenses and personal expenses.  Careful accounting is probably the #1 Habit of Highly Successful Taxpayers.  Details below the fold.

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July 13, 2020 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (0)

Sunday, July 12, 2020

The Top Five New Tax Papers

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

  1. SSRN Logo (2018)[347 Downloads]  The Legality of Digital Taxes in Europe, by Ruth Mason (Virginia) & Leopoldo Parada (Leeds)
  2. [165 Downloads]  Taxation Of The Digital Economy: Adapting A 21st-Century Tax System To A Twenty-First Century Economy, by Assaf Harpaz (S.J.D. 2020, Duke)
  3. [131 Downloads]  Are Two Employers Better than One? An Empirical Assessment of Multiple-Employer Retirement Plans, by Natalya Shnitser (Boston College)
  4. [117 Downloads]  Deeming Fictions in the Context of Tax Treaties — Analyzing Arguments in HMRC v. Fowler, by Dhruv Sanghavi (Maastricht)
  5. [105 Downloads]  New Technologies and the Evolution of Tax Compliance, by James Alm (Tulane), Joyce Beebe (Rice), Michael Kirsch (Notre Dame), Omri Marian (UC-Irvine) & Jay Soled (Rutgers)

July 12, 2020 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink | Comments (0)

Friday, July 10, 2020

Weekly SSRN Tax Article Review And Roundup: Layser Reviews Galle's The Agency Costs Of Forever Philanthropy

This week, Michelle Layser (Illinois) reviews Brian Galle (Georgetown), The Quick (Spending) and the Dead: The Agency Costs of Forever Philanthropy.

Layser (2018)

Philanthropists have many options for where to donate, but donor advised funds are a favorite among the ultra-wealthy. These close cousins to private foundations are accounts held through grant-making entities called commercial donor advised fund sponsoring organizations, or “DSOs.” Like private foundations, DSOs are subject to more restrictions than public charities. But unlike private foundations, those restrictions do not include a payout requirement.

As a result, DSOs offer a unique opportunity for donors to amass social influence through contributions that are never actually allocated to grants. Read that again: it is possible that contributions made to a DSO may never be used to fund real charity. In fact, IRS data suggests that roughly a fifth of DSOs averaged a payout rate of zero during the period for which information was available. But do low payout rates like these always reflect donor preferences? In a new essay, Professor Brian Galle offers compelling empirical evidence that the answer is no. At least part of the problem, according to Galle, can be attributed to agency costs that arise after a donor dies.

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July 10, 2020 in Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (2)

Lawsky: Situating Tax Experimentation

Sarah B. Lawsky (Northwestern), Situating Tax Experimentation: A Response to Michael Abramowicz’s Tax Experimentation, 71 Fla. L. Rev. F. 76 (2020):

In Tax Experimentation, [71 Fla. L. Rev. 65 (2019)], Professor Michael Abramowicz proposes that the government employ “tax experiments.” In these experiments, a subgroup of taxpayers would be treated differently than other taxpayers, for purposes of the tax law, for some period of time. The behavior of the treatment group could give the government information about tax policies. After briefly summarizing the article, this response suggests that Professor Abramowicz’s proposal has the potential for significant impact and that taking into account additional issues raised by existing tax scholarship—about tax morale, revenue estimation, and sunset provisions—will make the proposal even stronger.

July 10, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Thursday, July 9, 2020

Blank Presents Automated Legal Guidance Today At The Indiana/Leeds Summer Zoom Tax Workshop Series

Blank520Joshua D. Blank (UC-Irvine) presents Automated Legal Guidance (with Leigh Osofsky (North Carolina)) today as part of the Indiana/Leeds Summer Zoom Tax Workshop Series hosted by Leandra Lederman (Indiana) and Leopoldo Parada (Leeds):

Through online tools, virtual assistants and other technology, governments increasingly rely on artificial intelligence to help the public understand and apply the law. The Internal Revenue Service, for example, encourages taxpayers to seek answers regarding various tax credits and deductions through its online “Interactive Tax Assistant.” The U.S. Army directs individuals with questions about enlistment to its virtual guide, “Sgt. Star.” And the U.S. Citizenship and Immigration Services suggests that potential green card holders and citizens speak with its interactive chatbot, “Emma.” Through such automated legal guidance, the government seeks to provide advice to the public at a fraction of the cost of employing human beings to perform these same tasks.

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July 9, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Galle: The Agency Costs Of Forever Philanthropy

Brian D. Galle (Georgetown), The Quick (Spending) and the Dead: The Agency Costs of Forever Philanthropy:

This Essay offers new empirical evidence of the social cost of forever philanthropy, that is, of institutions that long outlive their founders. Drawing on a relatively unique dataset of foundation donors, and combining it with a large archive of tax returns filed by private foundations, I search for evidence that managers of long-lasting organizations depart significantly from the preferences of the organization’s supporters. I find that a firm’s overhead, or the ratio of administrative expenses to grants made, jumps by about 12% as soon as the organization’s last living donor dies. Payout rates, or the share of assets spent each year, move sharply in the opposite direction, falling about 7% at that time.

I interpret these findings as evidence of substantial agency costs. Since the timing of the donor’s death is relatively random, these outcomes offer convincing causal evidence that the ability of a donor to monitor her foundation’s managers importantly affects whether those managers follow her wishes. I argue that overhead and payout changes in the direction I observe strongly suggest that managers, once free from direct oversight, are operating the firm for their own comfort and security. Thus, by unnaturally extending the lifespan of foundations, law is encouraging wasteful allocation of taxpayer-supported charitable resources.

Therefore, I suggest several policy options that would reduce the agency-cost problem.

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July 9, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

SSRN Tax Professor Rankings

SSRN Logo (2018)SSRN has updated its monthly ranking 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.  Here is the new list (through July 1, 2020) 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 (Michigan)  191,980 Reuven Avi-Yonah (Michigan) 7,554
2 Dan Shaviro (NYU) 120,857 Lily Batchelder (NYU) 5,173
3 Lily Batchelder (NYU) 116,974 David Kamin (NYU) 4,892
4 David Gamage (Indiana-Bloom.) 116,895 D. Dharmapala (Chicago) 4,135
5 Daniel Hemel (Chicago) 116,579 Daniel Hemel (Chicago) 3,836
6 Darien Shanske (UC-Davis) 110,214 Ruth Mason (Virginia) 3,485
7 David Kamin (NYU) 105,294 Bridget Crawford (Pace) 3,183
8 Cliff Fleming (BYU)    104,927 Diane Ring (Boston College) 2,773
9 Manoj Viswanathan (UC-Hastings) 102,094 David Gamage (Indiana-Bloom.) 2,696
10 Rebecca Kysar (Fordham) 100,922 Shu-Yi Oei (Boston College)  2,680
11 Ari Glogower (Ohio State) 99,709 Hugh Ault (Boston College) 2,598
12 Michael Simkovic (USC) 44,553 Richard Ainsworth (BU) 2,446
13 D. Dharmapala (Chicago) 41,163 Dan Shaviro (NYU) 2,189
14 Paul Caron (Pepperdine) 37,011 Brad Borden (Brooklyn) 1,977
15 Louis Kaplow (Harvard) 33,399 Robert Sitkoff (Harvard) 1,909
16 Richard Ainsworth (BU) 30,210 Darien Shanske (UC-Davis)  1,867
17 Ed Kleinbard (USC) 26,933 Manoj Viswanathan (UC-Hastings) 1,728
18 Vic Fleischer (UC-Irvine) 26,196 Margaret Ryznar (Indiana-Indy)    1,658
19 Jim Hines (Michigan) 25,209 Louis Kaplow (Harvard) 1,607
20 Brad Borden (Brooklyn) 24,765 Paul Caron (Pepperdine)   1,442
21 Robert Sitkoff (Harvard) 24,378 Michael Simkovic (USC) 1,425
22 Ted Seto (Loyola-L.A.) 24,373 Ari Glogower (Ohio State) 1,424
23 Bridget Crawford (Pace) 24,271 Cliff Fleming (BYU) 1,420
24 Gladriel Shobe (BYU) 24,186 Rebecca Kysar (Fordham) 1,418
25 Richard Kaplan (Illinois) 23,768 Katie Pratt (Loyola-L.A.) 1,311

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July 9, 2020 in Scholarship, Tax, Tax Prof Rankings, Tax Rankings, Tax Scholarship | Permalink | Comments (0)

Wednesday, July 8, 2020

Bearer-Friend Presents In-Kind Taxpaying: Lessons And Risks Online Today At Ohio State

Jeremy Bearer-Friend (George Washington) presents In-Kind Taxpaying: Lessons and Risks online at Ohio State today as part of its Summer Workshop Series:

BearerFriend (2020)This Article examines non-cash remittance of tax obligations (ie; paying taxes "in-kind"). It begins by defining in-kind taxpaying, describing the early roots of in-kind taxpaying, and documenting the broad variety of inkind taxpaying in the US. It then discusses the lessons and risks of in-kind taxpaying. In doing so, this Article makes three contributions. First, it improves our definition of taxpaying by identifying the wide variety of inkind remittances that already occur in our current tax system, offering a taxonomy for how to understand in-kind remittances within a modern economy that relies primarily on cash taxes. Second, it refutes the presumption that in-kind remittance of tax obligations is not viable, thus expanding the tax tools available to local, state, and federal governments and demonstrating how narrow presumptions about tax remittance have predetermined core tax policy choices. Third, it confronts the substantial dangers of in-kind taxpaying, using these risks to propose new principles for limiting the design and administration of in-kind taxpaying.

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July 8, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)