Buckles, Wells Receive Professorships At Houston

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Beto O’Rourke: Churches Should Lose Tax-Exempt Status If They Oppose Same-Sex Marriage

The New Republic, Beto O’Rourke Is Out Over His Skis:

Desperate to stand out, he has proposed perhaps the worst idea of the Democratic primary.

Democratic presidential candidates have spent the year introducing wave after wave of new policy ideas. Some of them are excellent. Others are interesting. And a few would be disastrous. Beto O’Rourke’s call last week to deny tax-exempt status to churches and other religious institutions if they oppose marriage equality falls squarely within the last category.

The former Texas representative backed the idea at last week’s CNN town hall on LGBT issues. “Do you think religious institutions like colleges, churches, charities—should they lose their tax-exempt status if they oppose same-sex marriage?” moderator Don Lemon asked him. “Yes,” O’Rourke quickly replied. “There can be no reward, no benefit, no tax break for anyone, or any institution, any organization in America that denies the full human rights and the full civil rights of every single one of us. So as president we’re going to make that a priority and we are going to stop those who are infringing on the rights of our fellow Americans.”

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Tax Policy In The Trump Administration

• American Enterprise Institute (Dhammika Dharmapala (Chicago)), The Consequences of the Tax Cuts and Jobs Act’s International Provisions: The Early Empirical Evidence
• American Enterprise Institute (Alan Viard), The Misdirected Debate About the Corporate Tax Cut
• American Enterprise Institute (Kimberly Clausing (Reed College), The Tax Cuts and Jobs Act Was Never About Workers
• Bloomberg News, Brain Behind Wealth Tax Makes New Case for Soaking Billionaires
• Bloomberg News, Summers Lambasts Warren, Sanders Plans to Tax Wealth of the Rich

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Trump's Taxes And Tax Returns

• Bloomberg Opinion, Trump’s Tax Returns Just Got More Interesting
• The Hill, NY Prosecutors Urge Appeals Court Not to Block Subpoena for Trump's Tax Returns
• The Hill: Years Ago, Trump Wanted to Release His Tax Returns to Brag About How Little He Paid
• New York Daily News, ‘Confidential Informants’ Part of Manhattan DA Cy Vance’s Investigation Involving President Trump’s Tax Returns
• New York Times, Trump Urges Appeals Court to Shield Tax Returns From N.Y. Prosecutors

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Trump Weighs Weakening Obama Debt-Equity Rules To Curb Corporate Inversion

Bloomberg News, Trump Weighs Weakening Obama Rules to Curb Corporate Inversions:

Treasury Department officials are considering rolling back a tax rule aimed at preventing American companies from moving money offshore to avoid U.S. taxes, according to several people familiar with discussions.

The Treasury is looking at regulations intended to prevent American firms from lowering their U.S. tax bills by shifting income to their offshore branches that they can loan to their domestic branches and deduct the interest off their Internal Revenue Service bills. The department is also contemplating repealing them entirely to replace them with something more business-friendly.

The move could make it easier for companies to use accounting tactics to minimize their U.S. earnings and inflate their foreign profits, which are frequently taxed at rates lower than the current 21% domestic corporate levy. The existing regulations were aimed at stopping U.S. companies from moving their headquarters to a lower-tax country, known as a corporate inversion.s

Modifying the regulations, commonly referred to as the debt-equity rules, would also count as one of President Donald Trump’s favorite kinds of policy: Reversing a regulation introduced in the final days of President Barack Obama’s administration. ...

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The Truth About Who Pays What In Taxes

Following up on my previous posts:

• David Leonhardt (New York Times), The Rich Really Do Pay Lower Taxes Than You (Oct. 8, 2019)
• James Freeman (Wall Street Journal), New Problems With Elizabeth Warren’s Inequality Math
• Emmanuel Saez (UC-Berkeley) & Gabriel Zucman (UC-Berkeley), How To Tax Our Way Back To Justice (Oct. 14, 2019)

Wall Street Journal, Who Pays What in Taxes? The Answer Isn't So Simple.:

It is a tax policy question with a seemingly simple answer: Who pays what?

In reality, how taxes are distributed across income groups is hotly debated by economists—with enormous policy consequences. New findings by economists Emmanuel Saez and Gabriel Zucman of the University of California, Berkeley, have added fuel to this debate, challenging the conventional view that the poor pay relatively little and that effective tax rates rise with income.

In their new book, “The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay,” Messrs. Saez and Zucman find that tax rates, including state and local taxes, are roughly flat, ranging between 24% and 30% across most income groups. Then, they focus on the 400 highest-income adults and find a 23% tax rate, lower than any other group for the first time.

That conclusion challenges the view espoused by lawmakers and tax analysts affiliated with both parties that the U.S. has a progressive tax system. According to the Congressional Budget Office, the top 1% of households paid an average federal tax rate of 33% while the bottom one-fifth has a federal tax rate below 2%. Estimates including state and local taxes show somewhat higher taxes at the bottom.

Messrs. Saez and Zucman use their findings to prescribe sharply higher taxes on the rich, including an annual wealth tax, global coordination to raise corporate taxes and tougher enforcement. Democratic presidential candidates Bernie Sanders and Elizabeth Warren have endorsed a wealth tax, and both rely on Saez-Zucman estimates.

But the conclusions of Messrs. Saez and Zucman have been met with skepticism from some other economists who differ on how to assess and describe tax burdens. They split on what should count as income and taxes and on how varying techniques fill gaps in publicly available data.

“There is a very wide range where the truth may lie,” said Wojciech Kopczuk, a Columbia University economist who has been critical of the Saez-Zucman approach. ...

David Splinter, an economist with Congress’s Joint Committee on Taxation, counts the earned-income tax credit as income but doesn’t use the sum to reduce the net tax burden in his estimates. In a public response last week to Messrs. Saez and Zucman, he estimated the tax rate on lower-income households at 13%, compared with the Saez-Zucman method’s 24%.

Washington Post editorial, The Truth About Taxation in America:

Who says economics is the dismal science? Last week saw some positively scintillating intellectual combat between marquee-name practitioners, with the social media impact measurable in hundreds of likes and retweets. What’s more, there were real-world implications for how to measure a major social issue — inequality — and how to deal with it.

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IRS-Commissioned Study Defends Benefits Of Free-File Program In Face Of Criticism

Wall Street Journal, IRS Tax-Prep Alliance With Private Firms Gets Fresh Scrutiny: Study Defends Free File’s Benefits as Substantial:

The Internal Revenue Service’s partnership with private firms to provide free tax preparation to millions of filers has serious flaws but also appears to provide substantial benefits, according to an outside review commissioned by the IRS [Independent Assessment of the Free File Program (Oct. 3, 2019)]

The study, reviewed by The Wall Street Journal, responded to intense criticism of the public-private partnership, called the Free File Alliance. In theory the alliance is designed to provide free online tax-prep by a dozen companies to about 100 million filers who currently earn about $66,000 or less. Members include industry leaders such as H&R Block and Intuit, the maker of TurboTax.

But in recent years, Free File has been used by fewer than 3 million filers annually. Both the National Taxpayer Advocate and members of Congress have charged that the low usage rates signal that the program isn’t working well. Stories last spring by the nonprofit news site ProPublica drew more attention to the program’s workings. ...

Others say that commercial tax-prep companies in the alliance steer taxpayers away from Free File and into their paid commercial services. The study, conducted by the Mitre Corporation, a consulting firm that operates as an IRS research center, found that five of the 12 Free File members used coding that in effect hid their Free File landing pages from many online searches. ...

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Hemel: How Trump Can Put Off His Tax Return Case Until After The 2020 Election

Washington Post op-ed:  How Trump Can Put Off His Tax Return Case Until After the Election, by Daniel Hemel (Chicago):

A federal appeals court in Washington on Friday ordered President Trump’s longtime accounting firm to hand over stacks of financial documents to congressional investigators. When that dispute reaches the Supreme Court later this year, the justices will face a crucial choice: whether to schedule oral argument promptly and pave the way for a final ruling by summertime, or instead delay a decision until after next year’s general election.

The high court should not let Trump run out the clock. But if a bare majority of the justices wished to, they could. ...

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IRS Software Developer Stole Identities Of Three Taxpayers To Open Credit Cards In Their Names And Spend $70,000 Was Apprehended After Using IRS Email And Home Addresses

Quartz, An IRS Employee Stole Identities and Went on a 2-Year Spending Spree:

An IRS employee stole multiple people’s identities, and used them to open illicit credit cards to fund vacations and shop for shoes and other goods, according to a complaint unsealed last week in federal court.

The complaint accuses the 35-year-old federal worker of racking up almost $70,000 in charges over the course of two years, illegally using “the true names, addresses, dates of birth, and Social Security numbers” of at least three people. ...

The IRS employee’s alleged scheme took place between January 2016 and February 2018, according to court filings. Investigators say he used a fraudulently obtained American Express card to fly to Sacramento and Miami Beach. He also used the card for some 37 Uber rides, nine payments on his father’s Amazon account totaling $1,200, various purchases at Lowe’s, the Designer Shoe Warehouse, BJ’s Wholesale Club, and a flooring outlet, as well as a $7,400 payment to a business he owned.

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San Francisco State Seeks To Hire A Tax Prof

The San Francisco State University, Department of Accounting seeks applicants for a tenure-track Assistant/Associate Professor position with a specialization in Tax and Business Law. The position will start in August 2020.

The mission of San Francisco State University is to create an environment for learning that promotes appreciation of scholarship, freedom, human diversity, and the cultural mosaic of the City of San Francisco and the Bay Area; to promote excellence in instruction and intellectual accomplishment; and to provide broadly accessible higher education for residents of the region, state, the nation, and the world.

A Ph.D. in Accounting from an AACSB-accredited program or a J.D. and L.L.M with a Tax specialization from a nationally recognized law school is required.

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Saez & Zucman: How To Tax Our Way Back To Justice

New York Times op-ed:  How to Tax Our Way Back to Justice, by Emmanuel Saez (UC-Berkeley) & Gabriel Zucman (UC-Berkeley):

America’s soaring inequality has a new engine: its regressive tax system. Over the past half century, even as their wealth rose to previously unseen heights, the richest Americans watched their tax rates collapse. For the working classes over the same period, as wages stagnated, work conditions deteriorated and debts ballooned, tax rates increased.

Stop to think this over for a minute: For the first time in the past hundred years, the working class — the 50 percent of Americans with the lowest incomes — today pays higher tax rates than billionaires. ...

[W]we have estimated how much each social group, from the poorest to billionaires, paid in taxes for the year 2018. Our starting point is the total amount of tax revenue collected in the United States, 28 percent of national income. We allocate this total across the population, divided into 15 income groups: the bottom 10 percent (the 24 million adults with the lowest pretax income), the next 10 percent and so on, with finer-grained groups within the top 10 percent, up to the 400 wealthiest Americans.

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IRS Issues Cryptocurrency Tax And Reporting Guidance

Bloomberg Tax, IRS Adds Virtual Currency Question to Draft Income-Reporting Form:

Rev. Rul. 2019-24:

1. A taxpayer does not have gross income under § 61 as a result of a hard fork of a cryptocurrency the taxpayer owns if the taxpayer does not receive units of a new cryptocurrency.
2. A taxpayer has gross income, ordinary in character, under § 61 as a result of an airdrop of a new cryptocurrency following a hard fork if the taxpayer receives units of new cryptocurrency.

[43] Frequently Asked Questions on Virtual Currency Transactions:

In 2014, the IRS issued Notice 2014-21, 2014-16 I.R.B. 938 (PDF), explaining that virtual currency is treated as property for Federal income tax purposes and providing examples of how longstanding tax principles applicable to transactions involving property apply to virtual currency.  The frequently asked questions (“FAQs”) below expand upon the examples provided in Notice 2014-21 and apply those same longstanding tax principles to additional situations.

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Tax Policy In The Trump Administration

• American Enterprise Institute (William Gale), A Fixable Mistake: The Tax Cuts and Jobs Act
• American Enterprise Institute (Alex Brill), Pro-family Tax Policy: The case of the Tax Cuts and Jobs Act
• American Enterprise Institute (Len Burman), The Pro-Growth Argument for Progressive Tax Reform That Was Missing from TCJA
• American Enterprise Institute (Greg Leiserson), A Regressive, Deficit-Financed Tax Cut Is Not What the United States Needed
• American Enterprise Institute (R. Glenn Hubbard), The Tax Cuts and Jobs Act and investment: Progress, not perfection

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Trump's Taxes And Tax Returns

• CNBC, What We Might Learn From Trump’s Tax Returns — If They’re Released
• Forbes, IRS Whistleblower Alleges Treasury Department Official Tried To Interfere With Trump’s Tax Returns
• The Hill, California to Appeal Ruling That Blocks Law Requiring Trump Disclose Tax Returns in Order to Appear on Ballott
• Law.com, Deutsche Bank Doesn't Have President Donald Trump's Tax Returns, 2nd Circuit Says
• New York Times, Deutsche Bank Does Not Have Trump’s Tax Returns, Court Says

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OECD Takes Aim At Tech Giants With New Global Tax Proposal

• OECD, Secretariat Proposal for a “Unified Approach” under Pillar One
• OECD, Secretary-General Tax Report to G20 Finance Ministers and Central Bank Governors
• OECD, OECD Leading Multilateral Efforts to Address Tax Challenges from Digitalisation of the Economy

New York Times, Tech Giants Shift Profits to Avoid Taxes. There’s a Plan to Stop Them.:

Digital tax dodgers, take heed: International leaders have advanced a plan to prevent large multinational companies like Apple, Facebook and Amazon from avoiding taxes by shifting profits between countries.

It’s an effort to de-escalate a global battle over how to tax the digital economy.

The framework proposal, released Wednesday by the Organization for Economic Cooperation and Development, would allow countries to tax large multinationals even if they did not operate inside their borders. If international negotiators can now reach agreement on its key details, the plan will pave the way for new taxes not just on tech companies but on automakers and any other large multinational firms that operate online. ...

Wednesday’s release brought an 18-page framework plan that officials hope will form the basis of an international agreement on digital taxation as early as next year. That framework would fundamentally alter how and where companies that operated across national borders were taxed, though it leaves the details of those tax rates to future negotiators. It suggests new rules on where companies should pay taxes — largely based on where their sales occur — and on which profits are subject to taxation. ...

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NY Times: The Rich Really Do Pay Lower Taxes Than You

New York Times op-ed:  The Rich Really Do Pay Lower Taxes Than You, by David Leonhardt:

Almost a decade ago, Warren Buffett made a claim that would become famous. He said that he paid a lower tax rate than his secretary, thanks to the many loopholes and deductions that benefit the wealthy.

His claim sparked a debate about the fairness of the tax system. In the end, the expert consensus was that, whatever Buffett’s specific situation, most wealthy Americans did not actually pay a lower tax rate than the middle class. “Is it the norm?” the fact-checking outfit Politifact asked. “No.”

Time for an update: It’s the norm now.

For the first time on record, the 400 wealthiest Americans last year paid a lower total tax rate — spanning federal, state and local taxes — than any other income group, according to newly released data.

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House GOP Pushes Back Against Renewed Dem Efforts To Diminish Obama’s IRS Targeting Scandal

Conservative Review, House Republicans Push Back Against Renewed Dem Efforts to Diminish Obama’s IRS Targeting Scandal:

It appears that the House Oversight Committee may soon find itself in a renewed fight over the Obama-era IRS targeting scandal, according to a letter from a key House Republican.

In a Tuesday letter sent to U.S. Treasury Inspector General for Tax Administration (TIGTA), obtained by Blaze Media, House Oversight Committee ranking member Jim Jordan, R-Ohio, criticized a pair of House Democrats for renewing a years-old effort to second-guess findings of wrongdoing in the scandal. ...

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Fleischer: How A Democratic President Can Bypass Congress And Implement A More Progressive Tax Policy

The American Prospect:  Create a More Progressive Tax Policy, by Victor Fleischer (San Diego):

Congress writes the laws, but the IRS interprets them, and they can do so in ways that make the system more fair.

The next president can and should use executive authority to make our tax system more equitable. The Tax Cuts and Jobs Act, which passed in December 2017, had been drafted in secret and then rushed to a vote, leaving the Treasury Department and the IRS with many gaps to fill. And there are still plenty of old loopholes that need fixing, some of which can be addressed, or at least mitigated, without legislation.

The scope of executive authority is wide-ranging. ... The Treasury Department’s authority derives from its role in filling gaps in statutes. When a statutory term is unclear or ambiguous, the Treasury Department can interpret the term in order to provide guidance to taxpayers. The purpose of this authority is to allow Treasury to interpret the tax code, not to let the executive branch achieve by regulatory fiat that which could not be achieved through legislation. ...

[A] determined president can reshape tax policy without any help from Congress. I tend to take an expansive view of Treasury’s authority to interpret the tax code, which is rarely crystal clear. Here are a few ways a Democratic president might do so. ...

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This Week's Ten Most Popular TaxProf Blog Posts

1. New York Times, Open Offices Distract Us From Deep Work
2. Bryan Camp (Texas Tech), Lesson From The Tax Court: The Proper Role Of Delay In CDP
3. Paul Caron (Dean, Pepperdine), Week 1 Highlights Of The Dan Markel Murder Trial
4. Wall Street Journal, Is An MBA Still Worth It?
5. Paul Caron (Dean, Pepperdine), University Of Florida Law School Continues Its Rise In Student Quality And Rankings
6. Jonathan Choi (NYU), An Empirical Study of Statutory Interpretation in Tax Law
7. Inside Higher Ed, Speaking Out Against Student Evaluations Of Teaching
8. Peter Arcidiacono (Duke), Josh Kinsler (Georgia) & Tyler Ransom (Oklahoma), Harvard's Preferences For Athletes, Legacies, Dean's Interest, And Children Of Faculty/Staff Overwhelmingly Benefit Whites At Expense Of African-American, Asian-American, And Hispanic Applicants
9. Los Angeles Times, California To Require Mandatory Implicit Bias Training For All Attorneys By 2022
10. Wall Street Journal, U.S. Tax Gap Holds Flat At 14%

Tax Court Can’t Order IRS To Not Jerk People Around

Forbes:  Tax Court Can’t Order IRS To Not Jerk People Around, by Peter J. Reilly:

Jeffrey Davis is my new hero. From the record in Judge Ruwe’s Tax Court opinion, it appears that he got the IRS to back down on their notice of deficiency, but he didn’t stop there. He went on to recover $154.98 in costs.

But that is not the heroic part. He also sought to have the Tax Court order the IRS to not jerk other people around in the way that he was jerked around. In that quixotic quest he failed, because as the mantra goes the Tax Court is a court of “limited jurisdiction. Here is the story. ...

Mr. Davis contacted Senator Cory Booker’s office. They got the Taxpayer Advocate Service involved. Since the ninety day clock was ticking, there was also a Tax Court petition filed.

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Tax Policy In The Trump Administration

• American Prospect, How a Wealth Tax Would Increase—Not Decrease—Investment
• Bloomberg News, Here’s How Much More Democrat Candidates Would Pay Under Their Own Tax Plans
• Center for American Progress, Trump’s Corporate Tax Cut Is Not Trickling Down
• Center on Budget and Policy Priorities, State “Mansion Taxes” on Very Expensive Homes
• Common Dreams, 'Off by $1 Trillion,' Say Progressives on Two-Year Anniversary of Mnuchin Claim Trump Tax Cuts Would Slash Deficit

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Trump's Taxes And Tax Returns

• Bloomberg News, Democrat Weighs Releasing Complaint About IRS Trump Tax Audit
• Bloomberg Tax, Here’s What You Should Know as Trump Tax Return Battles Brew
• Business Insider: Another Whistleblower Has Come Forward Alleging That 'Inappropriate' Steps Were Taking to Influence an Audit of Trump's Taxes
• Common Dreams, Progressives Say Democrats Have Duty to Inform Public About 'Potentially Explosive' Whistleblower Alleging Trump Effort to Corrupt IRS
• Forbes, These Are All The Ways Democrats Are Trying To Get Trump’s Tax Returns Released

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U.S. Tax Gap Holds Flat At 14%

Wall Street Journal, U.S. Tax Compliance Holds Flat at 86%:

Americans pay about 86% of their federal taxes, leaving a $381 billion annual gap between taxes owed and taxes collected, according to an Internal Revenue Service study released Thursday.

The government’s first report on the “tax gap” since 2016 shows tax compliance holding steady as the IRS shrinks. However, the study covers tax years 2011 through 2013, and the IRS has reduced audits and staffing considerably since then.

In those years, taxpayers paid 83.6% of the taxes they owed voluntarily and a total of 85.8% after IRS enforcement efforts. Those are about equal to the previous study, which covered tax years 2008 through 2010 and was updated with the same methodology used for the new analysis.

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Northern Illinois Seeks To Hire A Tax Prof

Northern Illinois University College of Law invites applications for anticipated openings for two entry-level tenure-track faculty positions beginning August 2020. Duties include engaging in high quality research and teaching, as well as being an active participant in law school and university service. Requirements include a J.D. degree from an ABA accredited law school, an ability to engage in high quality research and teaching, and a willingness to actively participate in law school and university service.

We are particularly interested in candidates specializing in contracts, business associations, tax, torts, trusts and estates, and skills courses in the areas of pre-trial skills and/or business related skills.

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Case Western Tax Prof Is Still Teaching At 92 Years Old

Cleveland.com, Case Western Reserve University Law Professor Still Teaching at 92 Years Old:

You know that saying, “when you love what you do, you’ll never work a day in your life?”

Well, at 92 years old and still teaching four days a week, Professor Leon Gabinet is the true embodiment of that.

“I think at 92, I must be the oldest living professor,” Gabinet said, laughing.

News 5 checked with the American Association of University Professors, and while we're told the data around professor's ages isn't maintained, a spokesperson couldn't immediately think of professor above that age still teaching.

Gabinet teaches federal income tax law at the Case Western Reserve University School of Law — a place he has been a fixture since 1968. ...

“You would think going into a federal income tax class that it was going to be really dry and boring,” said law student Jess Ice. “But I laugh every class. I just have a great time. He has forgotten more about tax than I’ll ever learn in my life.”

It’s true — Professor Gabinet, at 92, has much of the tax code memorized by heart. And still, he spends hours before each of his classes every week reviewing materials and getting prepared. ...

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Colinvaux & Madoff: A Donor-Advised Fund Proposal That Would Work For Everyone

Chronicle of Philanthropy op-ed:  A Donor-Advised Fund Proposal That Would Work for Everyone, by Roger Colinvaux (Catholic) & Ray D. Madoff (Boston College):

More than $110 billion that Americans have earmarked for charity are now housed in donor-advised funds. DAFs are a fundraising phenomenon that make it easy to set aside dollars for good causes and get significant tax benefits right away.

But while the dollars are flooding into DAFs, too few dollars are coming out. That is because the legal framework governing these funds is out of sync with the way tax incentives are supposed to work. The reason for tax incentives is to get people to take an action deemed good for society, in this case, to make funds available so that charities can use them in support of their mission. But with donor-advised funds, the system is backwards: the federal government provides donors huge tax subsidies upfront, handing them out when the donor sets up a fund or augments it, but there is  no incentive to actually give the money away.

As legal scholars focused on public policy, we have long been concerned that the tax rules are not working as they should to get money to charities. When it comes to DAFs, we have advocated for the imposition of a payout term to ensure that DAF funds are distributed within a reasonable amount of time — say, a decade.

While a payout is one solution, as we have been studying the issue and hearing objections from sponsors of donor-advised funds, we have realized there is an even better approach that could maximize contributions, help donors save on taxes, and avoid abuses that lose money for the Treasury.

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NY Times: Tax Law’s Cap On State And Local Deductions Is Upheld By Court

New York Times, Tax Law’s Cap on State and Local Deductions Is Upheld by Court:

Congress didn’t unconstitutionally penalize Democratic-leaning states when it imposed a cap on federal deductions for state and local taxes, a federal judge ruled Monday.

The 2017 federal tax law, which President Trump signed after a party-line vote in Congress, limited to $10,000 the state and local tax payments that families can write off on their federal income taxes if they itemize deductions. The provision, known as the SALT cap, disproportionately affected residents of wealthy, high-tax states, where residents are more likely to have state tax bills that exceed the $10,000 limit.

Four states, including New York, sued the federal government last year, arguing that the cap is an “unconstitutional assault” on their sovereignty.

But on Monday, a Federal District Court judge in Manhattan rejected that argument. “The court recognizes that the SALT cap is in many ways a novelty,” the judge, J. Paul Oetken, wrote in his decision. “But the states have failed to persuade the court that this novelty alone establishes that the SALT cap exceeds Congress’s broad tax power.”

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The Financial Transaction Tax: A Progressive Tax With Beneficial Effects

Public Citizen, A Progressive Tax With Beneficial Effects:

A Small Levy on Financial Transactions Would Steer Clear of Struggling Americans, Raise Meaningful Revenue, and Possibly Retire An Abusive Wall Street Industry

A small tax on financial transactions, such as a one-tenth of 1 percent levy on the purchase of stocks and bonds, would likely end the viability of high-frequency trading while raising consequential sums for the U.S. Treasury. Opponents of this proposal have claimed it would hinder the ability of middle-class families to save for retirement. In contrast, we conclude that the costs of a modest financial transaction tax (FTT) would be little to nothing for middle-income families and would be easily manageable for average families in top income bracket.

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TaxProf Blog Weekend Roundup

Saturday:

• This Week's Ten Most Popular TaxProf Blog Posts
• Florida Coastal Law School Asks ABA To Reconsider Its Request To Shed For-Profit Status
• Kornhauser: American Voices In A Changing Democracy — Women, Lobbying, And Tax
• Symposium: Law Schools In The 21st Century

Sunday:

• Choi: An Empirical Study Of Statutory Interpretation In Tax Law
• Open Offices Distract Us From Deep Work
• California To Require Mandatory Implicit Bias Training For All Attorneys By 2022
• The Top Five New Tax Papers

This Week's Ten Most Popular TaxProf Blog Posts

1. Bryan Camp (Texas Tech), Lesson From The Tax Court: The Functional Definition Of 'Return'
2. Enjuris, Law School Enrollment by Race & Ethnicity
3. Matthew Smith (U.S. Treasury Department), Danny Yagan (UC-Berkeley), Owen Zidar (Chicago) & Eric Zwick (Chicago), Capitalists in the Twenty-First Century, 135 Q. J. Econ ___ (2019)
4. Tallahassee Democrat, Five Years After Dan Markel's Murder, Trial Of Two Suspects Begins Today
5. Fatih Guvenen (Minnesota), Gueorgui Kambourov (Toronto), Burhanettin Kuruscu (Toronto), Sergio Ocampo-Diaz (Minnesota) & Daphne Chen (Econ One), Efficiency Gains from Wealth Taxation
6. Bryce Clayton Newell (Kentucky), 2019 Meta-Ranking of Flagship US Law Reviews
7. Washington Post, How Excel's Automatic Data Formatting Can Cause Errors In Published Research
8. Derek Muller (Pepperdine), A Few Thoughts On Free Casebooks For Law Students
9. Symposium, Mindfulness and Well-Being in Law Schools and the Legal Profession, 48 Sw. L. Rev. 199-412 (2019)
10. Sahar Aziz (Rutgers), Identity Politics Is Failing Women in Legal Academia, 69 J. Legal Educ. ___ (2019)

Tax Policy In The Trump Administration

• American Enterprise Institute (William Gale), A Fixable Mistake: The Tax Cuts and Jobs Act
• American Enterprise Institute (Douglas Holtz-Eakin), Investment incentives and the Tax Cuts and Jobs Act
• Bloomberg News, Apple May Get Clues About Its Chances of Winning Tax Case of the Century
• Bloomberg Opinion, Sanders’s Wealth Tax Is Too Much of a Good Thing
• Forbes, Reviewing The Democratic Candidates' Tax Plans: Elizabeth Warren

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Trump's Taxes And Tax Returns

• CNN, What Pelosi's Impeachment Move Means in the Legal Fight Over Trump's Records
• The Hill, House Democrats Ask Judge to Let Lawsuit For Trump's Tax Returns Proceed
• Law.com, 'Go Home, Sober Up, Decompress:' US Judge Stays Trump Tax Subpoena Another Day
• New York Times, Federal Prosecutors Join Trump to Block Tax Return Subpoena
• New York Times, Prosecutor Says Trump Wants 'Sweeping Immunity' in Tax Fight

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This Week's Ten Most Popular TaxProf Blog Posts

1. Chronicle of Higher Education, The Great Enrollment Crash
2. Bryan Camp (TexasTech), Lesson From The Tax Court: Administrative File Notes Are Not Ex-Parte Contact
3. Paul Caron (Dean, Pepperdine), Tax Prof Twitter Rankings
4. WCTV & Law.com, In Advance Of Monday's Jury Selection In Dan Markel Murder Case, Magbanua Seeks Separate Trial
5. Law.com, Emory Investigating Reports That Two More Law Profs Used N-Bomb In Class
6. J. B. Ruhl, Michael Vandenbergh & Sarah Dunaway (Vanderbilt), Extending Leiter-Sisk Citation Counts To Interdisciplinary Scholarship
7. Paul Caron (Dean, Pepperdine), 46 Law Schools Accept The GRE For Admissions, And 5 Accept The GMAT
8. Bryce Clayton Newell (Kentucky), 2019 Meta-Ranking Of Flagship U.S. Law Reviews
9. Jason Solomon (Stanford), Trial Of Suspects In Dan Markel's Murder Nears As Friend Asks: What Should Happen When Your Mom and Brother Murder Your Ex?
10. Paul Caron (Dean, Pepperdine), July 2019 Florida Bar Exam Results: Florida International Is #1 For 5th Year In A Row

Tax Policy In The Trump Administration

• American Enterprise Institute, Don’t Give Up on the Tax Cuts and Jobs Act Just Yet
• American Enterprise Institute, ‘Not Much’: What Macroeconomic Data Say About the Impact of the Tax Cuts and Jobs Act
• Bloomberg News, Tax Cut 2.0 Looks Different to Trump Than to GOP Lawmakers
• Bloomberg News, Wealth Tax Would Be a Pain for the IRS and a Boon for Appraisers
• Bloomberg Opinion, Bill Gates Is Right to Support a Wealth Tax

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Trump's Taxes And Tax Returns

• National Law Journal, DC Judge in Trump Tax Returns Case Agonizes Over a Bunch of What-Ifs
• National Law Journal, Judge Blocks New California Law That Would Require Trump to Reveal Tax Returns
• National Law Journal, Trump Sues Manhattan DA Vance in Federal Court in Wake of Tax Subpoenas
• New York Times, 8 Years of Trump Tax Returns Are Subpoenaed by Manhattan D.A.
• New York Times, Trump Lawyers Try To Block Subpoena For His Tax Returns By Arguing He Cannot Be Criminally Investigated

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Carl Icahn Is Moving From NY To Florida For Lower Tax Rates

Bloomberg, Carl Icahn Is Heading to Florida for Lower Tax Rates:

Billionaire Carl Icahn is planning to move his home and business to Florida to avoid New York’s higher taxes, according to people familiar with the matter.

Icahn, 83, who was born in the Far Rockaway neighborhood in Queens, New York, has been an icon on Wall Street for decades. In the 1990s, he bought a mansion in the exclusive Indian Creek island enclave on Biscayne Bay in Miami.

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WSJ: One Argument For Radical Income Transparency

Wall Street Journal:  One Argument for Radical Income Transparency, by Oliver Hauser (University of Exeter Business School) & Michael Norton (Harvard Business School):

How much do people actually know about the income and wealth of people who live around them? And how does what they think they know skew the way they think about government taxes and spending?

Recent research we conducted suggests that the answer to those two questions are: Not much and a lot.

An emerging body of research suggests that citizens’ preferences for spending on public goods—from social programs to health care to infrastructure—are based in part about who they believe contributes and benefits. However, we discovered that many people are unaware of the true extent of inequality where they live. And in some cases, their beliefs are dramatically different than reality.

In our research, we assessed people’s behavior toward the rich and poor under two conditions in a controlled experiment: when inequality remains invisible (or hidden), and when we reveal it. We then explored whether people might view the behavior of lower-income people differently when they were made aware of just how little income being “low income” entailed.

In other words, I might be angry that poor people contribute very little in income tax to the overall federal budget. But I might feel differently when I realize that they have so little that any contribution represents a large percentage of their small income. ...

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Financial Times: Are Big Corporations Paying Enough Tax?

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Apple Takes On EU In World's Biggest Tax Case: $14 Billion

Bloomberg News, Apple Takes on EU’s Vestager in Record $14 Billion Tax Fight:

Apple fights the world’s biggest tax case in a quiet courtroom this week, trying to rein in the European Union’s powerful antitrust chief ahead of a potential new crackdown on internet giants.

The iPhone maker can tell the EU General Court in Luxembourg that it’s the world’s biggest taxpayer. But that’s not enough for EU Competition Commissioner Margrethe Vestager who said in a 2016 ruling that Apple’s tax deals with Ireland allowed the company to pay far less than other businesses. The court must now weigh whether regulators were right to levy a record 13 billion-euro ($14.4 billion) tax bill.

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WSJ: Inequality Is Holding Back The U.S. Economy

Wall Street Journal, Inequality Is Holding Back the U.S. Economy:

When it comes to money, America has always had winners and losers, but the widening gulf between the rich and the bulk of U.S. households may be making almost everybody worse off. That includes investors.

Income data released by the Census Bureau on Tuesday showed that the median U.S. household—the one in the statistical middle—had income of $63,200 last year. That was a bit more than the $62,600, adjusted for inflation, that the median household made in 2017. And it is well above the $56,750 that new data, adjusted for methodology changes, show the median household made in 2014, when many Americans were still smarting from the aftermath of the financial crisis.

But the 2018 figure was basically even with what the adjusted data show for 1999.

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NY Times: GAO Study Shows Income Gap Between Rich And Poor Keeps Growing, With Deadly Effects

New York Times, Study Shows Income Gap Between Rich and Poor Keeps Growing, With Deadly Effects:

The expanding gap between rich and poor is not only widening the gulf in incomes and wealth in America. It is helping the rich lead longer lives, while cutting short the lives of those who are struggling, according to a study released this week by the Government Accountability Office [Income and Wealth Disparities Continue through Old Age].

Almost three-quarters of rich Americans who were in their 50s and 60s in 1992 were still alive in 2014. Just over half of poor Americans in their 50s and 60s in 1992 made it to 2014.

“It’s not only that rich people are living longer but some people’s life expectancy is actually shrinking compared to their parents, for some groups of people,” said Kathleen Romig, a senior policy analyst at the liberal Center on Budget and Policy Priorities.

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Lesson From The Tax Court: Administrative File Notes Are Not Ex-Parte Contact

Tax collectors have an tough and lonely job.  I know.  I collected taxes for Arlington County, Virginia shortly after law school.  And when I was in IRS Office of Chief Counsel, my clients were Revenue Officers (ROs), the IRS employees whose dolorous job is to collect unpaid taxes. 

When a taxpayer receives a CDP hearing, ROs are prohibited from making ex part contacts with anyone in Appeals about the substance of the collections under review.  If the RO wants to communicate with anyone in Appeals about matters that are not ministerial, administrative, or procedural, they must give taxpayers an opportunity to participate in the discussion. Rev. Proc. 2000-43, §3, Q&A-6.   If they violate the ex-parte prohibition, then the CDP hearing becomes tainted and the ex part nature of the contact must either be cured or else the case be reassigned.  Rev. Proc. 2012-18, §2.10(1).

Not every communication from an RO to Appeals is a prohibited ex parte contact.  Last week’s case of Jason Stewart and Kristy Stewart v. Commissioner, T.C. Memo 2019-116 (September 10, 2019) (Judge Kerrigan) teaches a lesson in what does not constitute a prohibited communication from an RO to the Settlement Officer in a CDP hearing.  Details below the fold.

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This Week's Ten Most Popular TaxProf Blog Posts

1. Bryan Camp (Texas Tech), Lesson From The Tax Court: Transfer Of Partnership Shares Changes Interest Deduction
2. Bryce Clayton Newell (Kentucky), 2019 Meta-Ranking Of Flagship U.S. Law Reviews
3. Daily Kos, Trump Took A Big Loan From Trump And Never Paid Trump Back ... Because It's A Tax Scam
4. Robert Kuehn (Washington University) & David Moss (Wayne State), The Relationship Between Law School Coursework And Bar Exam Outcomes
5. ExpressO, Tax Journals With Openings For Articles
6. ABA, ABA Finds UDC And WNE Law Schools Out Of Compliance With Accreditation Standards
7. Rice University Baker Institute for Public Policy, The Current State of Sales Tax on Digital Products
8. U.S. News & World Report, 2020 College Rankings
9. New York Times op-ed, A Philosopher Asks: Should Work Be Our Passion, Or Our Duty?
10. Joint Statement by Eliza and Hugh Culverhouse, Jr. and the Board of Trustees of The University of Alabama, University of Alabama, Hugh Culverhouse End Spat After Return Of $21.5 Million Gift And Removal Of Donor's Name From Law School

Tax Policy In The Trump Administration

• Accounting Today, International Tax Reform in the TCJA Brings New Complications
• Bloomberg News, Richest Would Have Lost Half Their Wealth Under Elizabeth Warren’s Tax Plan
• Bloomberg News, Tax Break for Blighted Areas May Help Billionaire Art Collectors
• Bloomberg Opinion, Taxing Robots Is a Great Way to Make People Poor
• Bloomberg Tax, Digital Tax Plan May Prompt Need for New Global Referee

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Trump's Taxes And Tax Returns

• Bloomberg News, Trump Lawyers Push Judge to Throw Out Democrats’ Tax Return Suit
• The Hill, Trump Urges Judge to Deny New York's Motion to Dismiss State Tax Return Lawsuit
• The Hill, Trump Vows to Release Report on His Finances Before 2020 Election
• New York Times, California Says Tax Return Law Doesn't Bar Ballot Access
• Talking Points Memo, News Orgs Push Court To Reveal Full Deutsche Bank Letter About Trump Tax Returns

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Andrew Weiner Appointed To Lead Temple Tax LL.M. Program

Andrew Weiner Appointed to Lead LL.M. in Tax at Temple Law School:

Nationally recognized tax litigator Andrew Weiner has joined the faculty at Temple Law School, where he will serve as Director of the Graduate Tax Program and Practice Professor of Law.

In joining Temple’s nationally ranked tax program, Professor Weiner brings a wealth of tax litigation experience to an exceptional roster of scholar-teachers on the full-time faculty and highly accomplished adjuncts. He also brings experience in the classroom, having taught corporate tax and partnership tax at American University Washington College of Law for several years. In addition, Professor Weiner is developing a tax research and writing class, and has plans to explore interdisciplinary opportunities with Temple’s vaunted trial advocacy program. ...

Prior to joining Temple Law, Professor Weiner served for more than a decade in the Tax Division of the Department of Justice. Most of his tenure at the Tax Division was spent as an Attorney in the Appellate Section, where he briefed and argued approximately 50 cases, including Florida Bankers Association v. Department of the Treasury before the DC Circuit and Bedrosian v. United States before the Third Circuit—important victories for the government. During that time, Professor Weiner also served as Counsel to both Diana Erbsen (Deputy Assistant Attorney General for Appellate and Review) and Tamara Ashford (then Acting Assistant Attorney General & Deputy Assistant Attorney General for Appellate and Review and now a judge on the United States Tax Court). Most recently, he worked as a Trial Attorney at the Court of Federal Claims Section.

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29 Tax Profs Say Deference To Tax Court Is Not Needed In Altera

Bloomberg Tax, Deference to Tax Court Isn’t Needed in Altera Case, Academics Say:

Intel-owned Altera misrepresented how the Ninth Circuit should treat conflicting decisions between its own three-judge panel and the U.S. Tax Court, a group of legal academics said.

“No special deference is due to Tax Court decisions,” the 29 academics argued in an amicus brief filed with the U.S. Court of Appeals for the Ninth Circuit. They were responding to Altera's request for a rehearing in a tax dispute with the IRS.

The 29 Tax Profs signatories are:

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Trump Took A Big Loan From Trump And Never Paid Trump Back ... Because It's A Tax Scam

Daily Kos, Trump Took a Big Loan From Trump and Never Paid Trump Back ... Because It's a Tax Scam:

A loan listed on Donald Trump’s personal financial disclosure forms appears to be hiding a scheme in which he got tens of millions from Deutsche Bank and never reported the income to the IRS. It all adds up to a huge violation of federal tax law that Trump is hiding behind one of the many LLCs that make up the Trump Organization.

Donald Trump has debts. How many debts, and who is collecting on those debts, is not very clear. It’s especially not clear because Trump is fighting tooth and nail to prevent the release of his tax returns and to prevent banks from providing Congress with any information. But among Trump’s loans there is one that may be more mysterious than all the rest, and that’s the over $50 million that Donald Trump owes to … Donald Trump.

Trump’s business is not actually a single business at all, but an interwoven network of over 500 LLCs and holding companies. They may have different names, different assets, and even different addresses, but what almost all these companies have in common is that they are 100% owned by Trump.

With that in mind, Mother Jones took a look a Trump’s personal financial disclosure forms and found that he reports owing “over $50 million” to Chicago Unit Acquisition LLC. Trump owns that company 100%. So he owes that debt to himself. Which isn’t necessarily dishonest, but Trump sets the value of Chicago Unit Acquisition at zero. He’s borrowed at least tens of millions, but he doesn’t seem to be making any payments on this “loan” at all. That’s just the start of the weirdness. On the books of the company, the company that Trump owns, the loan to Donald Trump is classified as a high-risk loan. 

That last thing is certainly true. But everything else about this situation stinks to high heaven. As the Mother Jones analysis points out, it not only violates every rule of accounting, but it also looks like massive tax fraud.

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