Paul L. Caron
Dean




Sunday, May 22, 2022

Tax Experts Say Section 107 Housing Allowance For Clergy Remains Safe Despite Recent Cases And Greedy Abuses

Christianity Today, Churches Still Depend on Clergy Housing Allowance:

Despite recent legal cases and reports of greedy abuses, experts say the longstanding benefit remains safe.

Wth the federal tax filing deadline looming, a Virginia court case may have some ministers wondering whether their ministerial housing allowance is secure.

The case isn’t about the housing allowance. But to some, including Supreme Court Justice Neil Gorsuch, it suggests courts may be willing to meddle increasingly in clergy affairs, including housing.

At issue was denial of a property tax exemption for a church parsonage in Fredericksburg, Virginia. New Life in Christ Church sought the tax exemption for a church-owned home inhabited by two youth ministers, married couple Josh and Anacari Storms. The city denied the exemption because it claimed the church’s denomination, the Presbyterian Church in America (PCA), does not allow women to be considered ministers.

New Life in Christ said the city misunderstood its doctrine. Ordination and certain duties, like preaching, are limited to men in the PCA, according to the church, but the denomination’s governing documents permit congregations latitude in hiring nonordained persons like the Stormses for various ministry jobs. Yet a trial court sided with Fredericksburg, as did the Virginia Supreme Court.

The US Supreme Court declined to hear the church’s appeal in January. Now the church must continue paying the annual property tax bill of $4,589.15. The Supreme Court’s action provoked a dissent from Gorsuch.

“The City continues to insist that a church’s religious rules are ‘subject to verification’ by government officials,” Gorsuch wrote. “I would grant the [church’s] petition and summarily reverse. The First Amendment does not permit bureaucrats or judges to ‘subject’ religious beliefs ‘to verification.’”

Is the case a harbinger of increased willingness to scrutinize ministerial housing in court? Pastors across America hope not. While fewer churches own traditional parsonages, the majority take advantage of the federal clergy housing allowance and say it benefits both their families and their churches. ...

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May 22, 2022 in Faith, New Cases, Tax, Tax News | Permalink

Saturday, May 21, 2022

GAO: IRS Audit Rates Plummet For The Rich

GAO, Tax Compliance: IRS Audit Trends for Individual Taxpayers Vary by Income:

From tax years 2010 to 2019, audit rates of individual tax returns decreased for all income levels. On average, individual tax returns were audited over three times more often for tax year 2010 (about 0.9 percent) than for tax year 2019 (0.25 percent). Audit rates for taxpayers with incomes of $200,000 and above decreased the most, largely because higher-income audits tend to be more complicated and require auditors to manually review multiple issues, according to IRS officials. Because audit staffing has decreased, IRS cannot conduct as many of these audits, compared to lower-income audits, which are generally less complex and involve more automated processes. In addition, IRS officials stated that the number of returns filed by higher-income populations is growing, meaning more audits are needed to achieve the same audit rate.

Although audit rates decreased the most for higher-income taxpayers during this time period, IRS continued to audit higher-income taxpayers at higher rates than lower-income taxpayers, in general. However, IRS audited taxpayers claiming the Earned Income Tax Credit (EITC) at a higher rate than average (see fig. 1, using tax year 2019 as an example). IRS officials explained that EITC audits are limited in scope and historically have high rates of improper payments and therefore require a greater enforcement presence.

GAO 2

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May 21, 2022 in Tax, Tax News | Permalink

Thursday, May 5, 2022

WSJ Op-Ed: A Global Tax System Is Good For The U.S.

Wall Street Journal op-ed:  A Global Tax System Is Good for the U.S., by Jason Furman (Harvard):

The U.S. system for taxing international corporate income has long been dysfunctional. It is needlessly complex and distorts business decisions while failing to raise much revenue, thus forcing higher taxes elsewhere to make up the difference. Policy makers have the best chance in generations to reform and improve this system while bringing the rest of the world along. Treasury Secretary Janet Yellen has already helped craft an international agreement signed by more than 130 countries. Congress now needs to do its part and lock it in.

The two approaches to international taxation are worldwide taxation, in which a corporation’s home country taxes its entire global income, and territorial taxation, in which income is taxed only by the country where it is earned. Neither system is perfect, and both inevitably create some distortions.

A worldwide system can impede the competitiveness of American companies by raising their costs relative to those of competitors legally domiciled in other countries. A territorial system, on the other hand, creates an incentive to locate production and shift reported profits overseas.

Before 2017 the U.S. followed a third approach that that combined some of the worst features of both, which I call a “stupid territorial” tax system. It pretended to tax U.S. corporations on their worldwide foreign earnings but in practice afforded them tremendous opportunity to defer those taxes permanently, in effect allowing them to create a territorial system for themselves while leading to massive buildups of overseas income.

President Trump and the Republican Congress reformed this system, replacing it with a hybrid system that included a minimum tax called Global Intangible Low-Taxed Income, or Gilti, for companies that earned a high rate of return and also paid low taxes overseas. This plan took some steps toward a more rational system, recognizing the necessity of a compromise between worldwide and territorial. But it also took some steps backward on rates and in technical details, like allowing companies to apply the minimum tax based on their worldwide average rate instead of on a country-by-country basis. ...

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May 5, 2022 in Tax, Tax News | Permalink

Wednesday, May 4, 2022

New York Law Firms Open Miami Offices To Service Clients Audited By New York Tax Authorities After Moving To Florida

Law.com, Tax Controversy and Church Insolvency Brought Another New York Law Firm to Miami:

Miami (City) (2022)The 21-lawyer, full-service law firm Capell Barnett Matalon & Schoenfeld became among the latest New York law firms to expand to South Florida after firm leaders watched as client needs increasingly spanned the two regions.

This month, the firm announced a Miami office led by counsel David Zandi, a real estate attorney who launched the Capell Barnett’s one-lawyer location at 201 South Biscayne Blvd. in December.

In a recent interview, Zandi said the firm expanded to South Florida to serve two client categories: High-income New Yorkers who have been increasingly audited after moving to Florida full-time or becoming part-time residents, and churches with dwindling congregations and valuable land to spare.

“New York has been losing high-income New Yorkers who are going to Florida to pay zero [state income] tax,” Zandi said. “New York State has been auditing former and part-time residents to recoup the money. A lot of these clients who straddle the divide between New York and Florida also straddle the divide of tax controversy. If we can provide that service, that’s a big value-add for clients down here.”

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May 4, 2022 in Tax, Tax News | Permalink

Tuesday, May 3, 2022

WSJ: To Get Your Tax Records From The IRS, Taxpayers Still Have To Turn Over Sensitive Personal Info To Outside Vendor

Following up on my previous posts (linked below):  Wall Street Journal Tax Report, They’re Your IRS Records. Getting Them Means Giving Up Privacy.:

IRS Logo 2Tax Day 2022 has come and gone, but this year’s filing season brought an unpleasant surprise for many Americans that’s still here: People who want online access to their tax records at the Internal Revenue Service have to turn over sensitive personal information to an outside company to get them. ...

Over the last decade, the IRS has had severe problems with its own systems that limited access for many taxpayers, so last year it turned to an outside vendor, ID.me, to verify identities. ID.me, which originated to help military families access benefits, is based in McLean, Va. It now provides online ID verification services to 10 federal agencies and 30 states. Its contract with the IRS is for up to $86.8 million.

Now, taxpayers who want to view their IRS records online must submit copies of driver’s licenses, Social Security cards and other documents to ID.me as proof of identity.

ID.me says that due to federal requirements, applicants must also provide a certain type of facial “selfie” or else have an online video interview with a representative for comparison with photo IDs.

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May 3, 2022 in IRS News, Tax, Tax News | Permalink

Call For Volunteers: State Tax Administration Survey

Seeking Volunteers: State Tax Administration Survey:

Center for Taxpayer RightsUnder a grant from the Rockefeller Foundation, the Center for Taxpayer Rights has developed a questionnaire of state tax administration practices and procedures to better understand how taxpayer rights are protected under state law. The questionnaire gathers information relating to income tax (where applicable), property tax, sales tax, and any other statewide taxes. The questions involve laws related to Assessment, Appeals, Collection, and Litigation. Volunteers are asked to provide an explanation of applicable state law as well as a citation when possible. Once the information is collected, the Center will make recommendations for the adoption of practices shown to work well and will identify areas of deficiency in taxpayer protections and advocate for change where taxpayer rights are in jeopardy.  The Center plans to hold a Reimagining Tax Administration workshop in the fall of 2022 to discuss the survey findings and recommendations. More information can be found here.

The Center is seeking volunteers for the following states:

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May 3, 2022 in Tax, Tax News | Permalink

Tuesday, April 26, 2022

Freakonomics: Should We Have To Pay Taxes For Our Sins?

Freakonomics, Should We Have to Pay for Our Sins?:

Freakonomics 2In this world, nothing is certain, except for death and taxes — and those are both hot topics, especially lately, on this podcast. Last week, we talked about Tax Day itself — which is normally April 15 or thereabouts — and how the stress or incentives surrounding that day can make us change our behavior, consciously and unconsciously. Sometimes, changing behavior is the point of a tax. For centuries, so-called “sin taxes” have been put on products like alcohol and tobacco, which are bad for us as individuals, and also as a society.

When the government wants us to stop doing something, it can ban that thing altogether —like we do with assault rifles and copyright infringement. Lots of recreational drugs are banned, and we tried to ban alcohol in the 1920s, but banning products has its downsides. For one thing, it can create a black market, which causes all sorts of other problems. Another approach is to tax the behavior: Whatever it is, you can still do it, but it’ll cost you more. The purpose of sin taxes is to get us to use less of those things that are bad for us. To change our behavior in ways that will eventually improve our own health, and sometimes the health of others.

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April 26, 2022 in Tax, Tax News | Permalink

Monday, April 25, 2022

Hemel: The American Retirement System Is Built For The Rich

Washington Post Op-Ed:  The American Retirement System Is Built For the Rich, by Daniel Hemel (Chicago; Google Scholar):

Democrats and Republicans in Congress don’t typically agree on tax policy. But late last month, 216 House Democrats joined with 198 of their GOP colleagues to pass legislation advancing a cause that both parties have championed in recent years: ensuring that high-income individuals can stuff even more money into their tax-advantaged retirement accounts. Only five House members — all Republicans — voted no.

Overwhelming Republican support for the bill — known as the Securing a Strong Retirement Act of 2022, or Secure 2.0 — comes as no shock: Tax-cutting has long been a central plank of the GOP platform. What’s more surprising is that every Democrat in attendance backed the measure, too. Even Rep. Alexandria Ocasio-Cortez (D-N.Y.) — a pillar of the party’s left wing who at a gala last September sported a gown with the slogan “TAX THE RICH” — voted to bestow billions of dollars in benefits on the very taxpayers whom she says should pay more.

Bipartisan support for Secure 2.0 is part of a decades-long pattern: While loudly and proudly proclaiming that their goal is to nurture nest eggs for the working class, lawmakers have constructed a complex of tax shelters for the well-to-do. The lopsided result is that as of 2019, nearly 29,000 taxpayers had amassed “mega-IRAs” — individual retirement accounts with balances of $5 million or more — while half of American households had no retirement accounts at all. Overall, according to the Congressional Budget Office, the top 10th of households reap a larger share of the income tax subsidy for retirement savings than the bottom 80 percent.

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April 25, 2022 in Tax, Tax News | Permalink

Tuesday, April 19, 2022

ProPublica: If You’re Getting A W-2, You’re A Sucker

ProPublica, “If You’re Getting a W-2, You’re a Sucker”:

Pro PublicaThere are many differences between the rich and the rest of us, but one of the most consequential for your taxes is whether most of your income comes from wages.

Nikki Spretnak loved being an IRS agent. Being able to examine the books of different businesses gave her an intimate view of the economy. But over the years, she became more and more conscious of a chasm between the business owners she was auditing and herself. It wasn't so much that they were rich and she, a revenue agent in the IRS office in Columbus, Ohio, was not. It was that, when it came to taxes, they lived a privileged existence, one that she, a mere W-2 recipient, did not share.

Over the past year, along with a team of my colleagues at ProPublica, I’ve spent countless hours scrutinizing the tax information of thousands of the wealthiest Americans. Like Spretnak, I’ve seen behind the veil and witnessed the same chasm. Doing my own taxes in the past was never a thrill, but only this spring did I fully realize what a colorless and confined tax world I inhabit.

For me, and for most people, filing taxes is little more than data entry. I hold in my hand my W-2 form from my employer and dutifully peck in my wages. Next come the 1099 forms that list my earnings from dividends or interest, and again my finger gets to work. The IRS has a copy of these forms, too, of course, making this drudgery somewhat pointless. By the end of it, there, in black and white, is my income.

The financial reality of the ultrawealthy is not so easily defined. For one, wages make up only a small part of their earnings. And they have broad latitude in how they account for their businesses and investments. Their incomes aren’t defined by a tax form. Instead, they represent the triumph of careful planning by skilled professionals who strive to deliver the most-advantageous-yet-still-plausible answers to their clients. For them, a tax return is an opening bid to the IRS. It’s a kind of theory. ...

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April 19, 2022 in Tax, Tax News | Permalink

Monday, April 18, 2022

Freakonomics: What Do A Full Moon, The Super Bowl, And Tax Day Have In Common?

Freakonomics, What Do A Full Moon, The Super Bowl, And Tax Day Have In Common?:

Freakonomics 2[The episode] explores the health implications of Tax Day, from increased car crash fatalities to the timing of babies being born. Host Dr. Bapu Jena explores two recent studies:

University of Toronto doctor and researcher Donald Redelmeier explains why fatalities from car crashes increase on Tax Day [The Full Moon and Motorcycle Related Mortality: Population Based Double Control Study]:

The increased risk on Tax Day extended all over the United States. It was mostly explained by working-age adults exactly as you would expect. And it also extended to pedestrians. So even if you yourself have filed your taxes early, it doesn't mean that all of those surrounding motorists have.

Williams College economist Sara LaLumia examines a small group of parents choosing when to have their babies based on tax deadlines [New Evidence on Taxes and the Timing of Birth]:

Late-December moms are going to have more cash on hand in the early months of their child's life, because they got the child-related tax benefits right away. January moms have to wait a whole year before they can get those tax benefits… December moms are a little bit less likely to work, particularly in the third month after giving birth, than the January mothers. Maybe having a little extra cash on hand is allowing people to buy a little bit more time before they returned to work.

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April 18, 2022 in Tax, Tax News | Permalink

Saturday, April 16, 2022

President Biden And Vice President Harris Release Their 2022 Tax Returns

Thursday, April 14, 2022

Inequality And Thomas Piketty's Accounting Error

Following up on last week's post, Thomas Piketty Thinks America Is Primed For Wealth Redistribution:  Wall Street Journal op-ed:  Inequality and the Piketty Accounting Error, by Phillip W. Magness (American Institute for Economic Research; Google Scholar) & Vincent Geloso (George Mason; Google Scholar):

The political left’s love affair with steep progressive taxation got an academic boost with the publication of Thomas Piketty’s bestselling 2014 book, Capital in the Twenty-First Century. Appealing to the New Deal era, Mr. Piketty proposed a simple explanation and remedy for rising economic inequality: The concentration of income among the top 1% could be mitigated by strategically targeting wealth with the tax system.

Mr. Piketty based his theory on a historical argument taken from his own empirical work with fellow economist Emmanuel Saez. When Congress and President Franklin D. Roosevelt hiked the top marginal income-tax rate to 91% during the New Deal and World War II, they allegedly broke up the concentration of the capital stock at the top of the income ladder. Inequality declined to a midcentury trough, where it remained until the Reagan tax cuts in the 1980s. Inequality then rebounded to form a centurylong U-shaped pattern. The solution, then, is to restore tax rates to their FDR levels.

But the Piketty-Saez theory is less a matter of history than an accounting error caused by their misunderstanding of World War II-era tax statistics. That’s the main conclusion of a new analysis of top income concentration in the U.S. between 1917 and 1960, which we recently published in the Economic Journal [How Pronounced Is the U-curve? Revisiting Income Inequality in the United States, 1917-1960].

Progressives embraced Messrs. Piketty and Saez’s historical account after it appeared in an influential academic paper in 2003. ...

It’s true that income inequality declined in the early part of the 20th century, but the cause had more to do with the economic devastation of the Great Depression than the New Deal tax regime. ...

The nearby chart shows the results for the top 1% of income earners. In our series, inequality rose between 1917 and 1928, confirming the “Roaring ’20s” boom. The crash of 1929 emerges as the precipitating event of the “great leveling”—mainly due to severe capital losses among the wealthy during the Depression.

WSJ

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April 14, 2022 in Tax, Tax News | Permalink

ProPublica Names The 15 Americans Who Reported The Most Income And Reveals Data For The Top 400

ProPublica, America's Highest Earners and Their Taxes Revealed:

Pro PublicaSecret IRS files reveal the top US income-earners and how their tax rates vary more than their incomes. Tech titans, hedge fund managers and heirs dominate the list, while the likes of Taylor Swift and LeBron James didn’t even make the top 400.

ProPublica, America’s Top 15 Earners and What They Reveal About the U.S. Tax System:

An unprecedented trove of leaked IRS data shows who reported the most income in America from 2013 to 2018, as well as their tax rates, revealing that the very richest pay lower rates than the merely rich.

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April 14, 2022 in Tax, Tax News | Permalink

Wednesday, April 13, 2022

U.S. Tax Court's Tax Trailblazers: Ron Sweeney

U.S. Tax Court's Diversity & Inclusion Series, Tax Trailblazers: Mentoring the Next Generation:

Ron-sweeneyPlease join the United States Tax Court as its Tax Trailblazers series continues with entertainment attorney, manager, consultant, and former record executive Ron Sweeney today at 7:00-8:15 PM EST (register here). 

Ron Sweeney is a prominent entertainment attorney, manager, consultant, and former record executive who has managed major artists and practiced law for over forty years.

Mr. Sweeney grew up in South Central Los Angeles and attended George Washington High where he excelled as a jazz/rock/R&B drummer. He went to college at the University of California at Los Angeles and, while there, worked for the Internal Revenue Service as a tax auditor of high-net-worth individuals. Mr. Sweeney earned his JD from the University of Southern California, and is licensed to practice law in California.

He has done major deals for everybody from Clarence Avant, James Brown, Eazy-E, DMX, Sean "Puffy” Combs, to Lil Wayne and Young Money. He created Avant Garde Management and began representing the all-girl band “Klymaxx.” He also managed Morris Day and the Time, co-managed the pop band “Color Me Badd,” and others. In the early nineties he represented Eazy-E and Ruthless Records.

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April 13, 2022 in Legal Ed News, Legal Education, Tax, Tax News | Permalink

Tuesday, April 12, 2022

NY Times: Holders Of Vanguard Target Funds File Class Action Over Massive Capital Gain Tax Bills

Following up on  my previous post, Wall Street Journal: The Huge Tax Bills That Came Out Of Nowhere At Vanguard:  New York Times, For Taxes, Where You Hold Your Investments Really Matters:

VanguardTax bills are bad enough when you know they are coming. When they are unexpected and large, and come from what seemed like a safe and reliable place, they are infuriating.

That’s a rough summary of the effect of the big bills that some investors face because they hold retirement funds run by Vanguard and a handful of other fund companies in taxable accounts.

This tax problem hasn’t arisen for people who hold these so-called target date funds in tax-sheltered accounts — workplace retirement accounts like 401(k)s, or I.R.A.s. But for investors holding target date funds in ordinary, taxable accounts, it’s a different story. ...

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April 12, 2022 in Tax, Tax News | Permalink

Tuesday, April 5, 2022

NY Times: Thomas Piketty Thinks America Is Primed For Wealth Redistribution

New York Times, Thomas Piketty Thinks America Is Primed for Wealth Redistribution:

PikettyIn 2013, the French economist Thomas Piketty, in his best seller Capital in the Twenty-First Century, a book eagerly received in the wake of the 2008 economic collapse, put forth the notion that returns on capital historically outstrip economic growth (his famous r>g formula). The upshot? The rich get richer, while the rest of us stay stuck in the mud. Now, nearly a decade later, Piketty is set to publish A Brief History of Equality, in which he argues that we’re on a trajectory of greater, not less, equality and lays out his prescriptions for remedying our current corrosive wealth disparities. (In short: Tax the rich.) If the line from one book to the other looks slightly askew given the state of the world, then, Piketty suggests, you’re looking from the wrong vantage point. “I am relatively optimistic,” says Piketty, who is 50, “about the fact that there is a long-run movement toward more equality, which goes beyond the little details of what happens within a specific decade.” ...

What did you think of the billionaire tax that Biden just proposed?
It would have been better before his election. If you had told the American public before the elections that he wanted a wealth tax — which again is something that is very high in opinion polls — this would have been much easier. This could have forced the Democratic Congress to take a stand. It’s more complicated now. But if it works, it’s better than nothing. ...

You know, I do find it hard to wrap my head around the idea that after 40 years of worsening inequality, you — the inequality guy, Mr. r>g — are publishing a book saying we’re on the right track historically. It’s sort of cold comfort to know we’re more equal today than we were 100 or 200 years ago. Really give me a reason to feel as optimistic as you do. 

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April 5, 2022 in Book Club, Tax, Tax News, Tax Scholarship | Permalink

D.C. Circuit Judge Suggests Trump Could Be Treated As Sitting President In Fight With Congress Over His Tax Returns

National Law Journal, Judge Suggests Trump Could be Treated as Sitting President in Fight With Congress Over Tax Documents:

The U.S. Court of Appeals for the D.C. Circuit on Thursday wrestled with whether former President Donald Trump should be treated like a sitting president or a private citizen in his bid to shield his tax records from a House committee.

Judge Karen LeCraft Henderson repeatedly noted that Trump was in office when the House Ways and Means Committee initially requested his tax returns in 2019 as part of an investigation into how the IRS audits presidents. She said the House’s ability to use document requests to gain “an institutional advantage” over the executive branch is still in play, even though Trump is no longer in office.

“We have been all wound up in who the president is at the time, who is the chairman, who is in the executive branch, including Treasury and the IRS,” she said. “We’ve got to look at this case as the executive branch vs. legislative branch as institutions.”

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April 5, 2022 in Tax, Tax News | Permalink

Wednesday, March 9, 2022

BigLaw Tax Lawyer Is Suspended After Trying To 'Power Through' Depression

Michael S. Frisch (Georgetown), BigLaw Pressures:

Morgan_Lewis (2022)An attorney who had neglected a tax appeal, failed to communicate with the client, made misrepresentations to cover up the neglect and filed two false affidavits has been suspended for a year and a day by the Pennsylvania Supreme Court. The attorney's misconduct occurred while employed at Morgan, Lewis & Bockius. ...

The matter involved a tax assessment appeal to the Department of Revenue Board of Appeals. The firm conducted an internal investigations after the client raised concerns.

ABA Journal, Former BigLaw Lawyer Who Wrongly Thought He Could 'Power Through' Depression Gets Suspension:

[Daniel Michael] Dixon said he couldn’t get over the anxiety of potentially losing his job, so he tried to fix his mistake and then made things worse by being dishonest.

He told the committee that he had suffered from depression and anxiety after a breakup with his wife in 2013. He said he was “in no way prepared” to handle the position at Morgan Lewis when he accepted the job in 2016.

Dixon “testified that he ‘oversold’ his ability to be a practice group leader in the state and local tax area and was not prepared to come into the firm and build a team,” according to the disciplinary board report.

In hindsight, Dixon thought that he should have taken more time off to address his mental health issues before accepting the position at Morgan Lewis.

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March 9, 2022 in Legal Ed News, Legal Education, Tax, Tax News | Permalink

Tuesday, March 8, 2022

WSJ: IRS Is Audited Over Its Safeguards Against Favored Treatment Of Big Business

Following up on my previous posts:

Wall Street Journal, IRS Is Audited Over Its Safeguards Against Favored Treatment of Big Business:

The Internal Revenue Service’s watchdog is examining how the agency guards against favoring large businesses and global companies in compliance matters as part of a broad audit.

The U.S. Treasury Inspector General for Tax Administration, or Tigta, has reached out to people inside and outside the IRS for information since starting work on the audit late last year, according to a person familiar with the inquiry. Among the lines of inquiry is how the IRS handles conflicts of interest and the revolving door between the accounting industry and IRS, the person said.

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March 8, 2022 in IRS News, Tax, Tax News | Permalink

Monday, March 7, 2022

NY Times: Decades Of Neglect Leave IRS In Tax Season ‘Chaos’

New York Times, Decades of Neglect Leave I.R.S. in Tax Season ‘Chaos’:

IRS Logo 2At the Internal Revenue Service’s sprawling Kansas City, Mo., processing center, teams of clerks earning $15 per hour work through the night, trying to help the agency clear a backlog of more than 20 million tax returns that are a year overdue.

The conditions are subpar: Scanners sputter, forcing workers to enter data by hand, staplers are scarce and piles of tax documents overflow from carts.

“The general theme for the time I’ve been there has been chaos,” said Shawn Gunn, a clerk in the receipt and operations group at the I.R.S. who started working at the facility in Kansas City last June and is transitioning to become a tax examiner.

What’s happening in Kansas City provides a window into the problems plaguing the I.R.S., which is mired in a political and logistical mess that has frustrated taxpayers, angered lawmakers and put a key source of funding for President Biden’s economic agenda in jeopardy.

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March 7, 2022 in IRS News, Tax, Tax News | Permalink

Saturday, March 5, 2022

ProPublica: Filing Your Taxes For 'Free' Online Is Confusing And Soul-Sucking By Design

Following up on my previous posts (links below):  ProPublica, Is TurboTax Free? What About Easy? Not for This Freelancer.:

TurboTaxOne reporter spent 2021 freelancing, giving her just the kind of low-paying tax mess that TurboTax’s innovative services or the IRS Free File program should be able to help with. Her foray into “easy” tax prep tools proved otherwise.

If you watch TV, you’ve likely been inundated with ads about tax prep services that promise to meet your every need or let you file for free.

It’s the time of year when people open search engines and ask: “Is TurboTax free?”

ProPublica has been asking similar questions since 2013, when we first reported on how Intuit, TurboTax’s parent company, fought to keep the government from setting up a free, simple tax filing process. In the intervening years, our reporters have stayed on the story, uncovering the company’s sweeping history of lobbying and “dark pattern” customer tricks, which have helped it fend off a free government tax-filing option and create a multibillion-dollar software franchise.

Last year, we wrote a guide presenting several ways people could file their taxes for free. But this year a few things have changed: For one, TurboTax is no longer participating in the IRS Free File program, a public-private partnership that it helped construct. Under Free File, tax prep companies agreed to provide free online filing to tens of millions of lower-income taxpayers, and in exchange the government agreed not to offer its own free filing tools. In 2019 and earlier years, TurboTax and H&R Block together accounted for around two-thirds of all filings through the program, according to ProPublica’s analysis. But H&R Block left the program in 2020, and now, Intuit wrote in a blog post, it too is leaving “to focus on further innovating in ways not allowable under the current Free File guidelines.”

A spokesperson for Intuit said the company was “at all times clear and fair with its customers” and has upheld its obligations to the IRS under the Free File program.

Despite the departure of the two major players, the IRS Free File program will still let you file your federal taxes for free if you make less than $73,000 a year. You can browse the list of the remaining providers yourself, or you can answer a couple questions and have the lookup tool connect you with the providers you are eligible to use.

Wait, in case you missed that: If you get nothing else from this story, please remember that you can file your federal taxes FOR FREE.

Still, TurboTax’s departure made me wonder: What are these amazing innovations it’s offering that aren’t “allowable” under IRS guidelines? Are they worth the cost of dealing with TurboTax? ...

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March 5, 2022 in Tax, Tax News | Permalink

Friday, March 4, 2022

A Portrait Of The Wall Street Journal's Tax Report Columnist Late In Her Career

Wall Street Journal, Journalist Voices: Laura Saunders:

SaundersLaura Saunders is the current writer of "Tax Report," The Wall Street Journal's oldest column and a favorite with readers. She has long specialized in writing about taxes, first at Forbes and since 2009 for the Journal. “Taxes sit squarely at the intersection of economics and politics, with consequences for everybody. I enjoy trying to make them clear for Journal readers,” she says.

She also studies economic thought in literature and has lectured on how Moby-Dick's focus on whaling makes it the greatest novel about American business. She is a native of Tennessee with a B.A. from Sewanee: The University of the South, and an M.A. from Columbia University.

Q: How would you describe what you do each day?
A: I read, report and write about taxes. All tax, all the time. ...

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March 4, 2022 in Tax, Tax News | Permalink

ProPublica: When Billionaires Don’t Pay Taxes, People 'Lose Faith In Democracy'

Following up on my previous posts (links below):  ProPublica, When Billionaires Don’t Pay Taxes, People “Lose Faith in Democracy”:

Pro PublicaIn an interview, Senate Finance Chair Ron Wyden described the effect of the tax dodging revealed in “The Secret IRS Files” and argued that his stalled efforts to make the ultrawealthy pay what he calls “their fair share” could still bear fruit.

Last year, ProPublica began publishing “The Secret IRS Files,” a series that has used a vast trove of never-before-seen tax information on the wealthiest Americans to examine their tax avoidance maneuvers.

Since then, the Biden Administration and Democrats in Congress have been trying to close loopholes in the code and raise taxes on the rich to fund their legislative priorities. But the efforts have stalled, amid claims by Republicans that tax increases on billionaires would destroy investment in America and punish success in America” and resistance from key Democrats, Sen. Joe Manchin, who called such a plan divisive, and Sen. Kyrsten Sinemawho has opposed tax increases more broadly.

Ron Wyden, the Oregon Democrat who chairs the Senate Finance Committee, is one of the top experts in Congress on tax matters and an advocate of raising taxes on the rich. He has proposed a bill that would build on his past efforts to tax the wealthiest. The most recent legislation would tax people with $1 billion in assets (or $100 million in income for three years in a row) not just on their income as it is traditionally defined but also on the growth of their wealth each year. It would take a bite out of so-called unrealized gains, taxing a rise in the value of the stocks, bonds and other assets owned by the ultrawealthy — even if they didn’t sell the assets. For assets that are not readily traded, Wyden’s bill would impose a deferred tax, an annual interest charge that would be added to any capital gains tax owed when the wealthy person sells the asset.

Wyden’s bill seeks to counteract a technique that the ultrawealthy can use to avoid income taxes: They hold on to their assets and simply avoid the income — and tax — that comes when they sell them. The rich can live lavishly by employing a technique known as “Buy, Borrow, Die,” in which they buy or build assets, borrow against them and then avoid estate and gift taxes when they die.

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March 4, 2022 in Tax, Tax News | Permalink

Thursday, March 3, 2022

Ukraine: Captured Russian Tanks And Military Equipment Are Not Taxable Income

Business Insider, Ukrainian Authorities Say Citizens Don't Need to Declare Captured Russian Tanks and Military Equipment for Tax Purposes:

UkraineUkrainian authorities have reassured citizens that they don't need to declare captured Russian tanks or any equipment they pick up as personal income.

"Have you captured a Russian tank or armored personnel carrier and are worried about how to declare it? Keep calm and continue to defend the Motherland!" a statement from the Ukrainian National Agency on Corruption Prevention seen by Interfax-Ukraine said.

"There is no need to declare the captured Russian tanks and other equipment, because the cost of this ... does not exceed 100 living wages," or 248,100 Ukrainian hryvnia, the agency said, according to Interfax-Ukraine. The sum equates to about $8,300.

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March 3, 2022 in Tax, Tax News | Permalink

Monday, February 28, 2022

NY Times: Treasury Is Asked To Investigate Its Hiring Of Tax Lawyers From Big Accounting Firms

Following up on my previous post, NY Times: Tax Lawyers At Top Accounting Firms Cycle In And Out Of Top Treasury Posts And Reap Huge Reward For Their Clients And Themselves:  New York Times, Treasury Is Asked to Investigate Its Hiring of Lawyers From Big Accounting Firms:

Big 5A pair of Democratic lawmakers asked the Treasury Department’s inspector general on Tuesday to investigate the revolving door between the country’s biggest accounting firms and key policy positions at the Treasury.

Senator Elizabeth Warren of Massachusetts and Representative Pramila Jayapal of Washington were prompted by an investigation published by The New York Times in September detailing how giant accounting firms embed top lawyers inside the government to draft tax rules that benefit their clients.

The Times found at least 35 examples in which lawyers at the country’s biggest accounting firms left to join the government, largely in the Treasury’s tax policy office, and then returned to their old firm.

The Times found that while in the government, many of those lawyers granted tax breaks to their former firms’ clients, softened efforts to clamp down on tax shelters and approved loopholes used by their former firms. In nearly half the examples, the officials were promoted to partner upon rejoining their old firm.

The pattern has been repeated in both Democratic and Republican administrations, including those of Donald J. Trump, Barack Obama, George W. Bush and Bill Clinton.

Since October, the two lawmakers collected information from five accounting firms — PwC, EY, Deloitte, RSM and KPMG — detailing the phenomenon. ...

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February 28, 2022 in IRS News, Tax, Tax News | Permalink

A Conversation With Lloyd Hitoshi Mayer (Notre Dame)

Capital Research Center, A Conversation with Notre Dame Law School’s Lloyd Hitoshi Mayer (Part 1):

The scholar of nonprofit and election law talks to Michael E. Hartmann about what should and shouldn’t be considered a subsidy for charities, and the relationships between charity, politics, and government.

Professor Lloyd Hitoshi Mayer has researched, studied, taught, and written about many various aspects of nonprofit and election law since he came to Notre Dame Law School 17 years ago from the Washington, D.C., office of Caplin & Drysdale, where he’d practiced in those same areas for almost a decade.

Mayer’s recent published scholarship, for example, has thoroughly examined charitable crowdfunding, when tax exemption should and shouldn’t be considered a subsidy, fundamental public policy and the tax exemption of churches, and government use of “Big Data” in nonprofit regulation, among other things. His thoughtful “When Soft Law Meets Hard Politics: Taming the Wild West of Nonprofit Political Involvement,” in Notre Dame’s Journal of Legislation, caught our attention in particular and likely will inform policymaking discourse in the coming years.

Capital Research Center, A Conversation with Notre Dame Law School’s Lloyd Hitoshi Mayer (Part 2 of 2):

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February 28, 2022 in Legal Ed News, Legal Education, Tax, Tax News | Permalink

Saturday, February 26, 2022

ProPublica: TurboTax Maker Intuit Faces Tens Of Millions In Fees In A Groundbreaking Legal Battle Over Consumer Fraud

Following up on my previous posts:

ProPublica, TurboTax Maker Intuit Faces Tens of Millions in Fees in a Groundbreaking Legal Battle Over Consumer Fraud:

Faced with a class-action suit filed on behalf of customers who claim they were tricked into paying to file their taxes, TurboTax-maker Intuit knocked the case down. The company insisted its customers had agreed to forego their right to take their grievances to court and were required to use the private arbitration system instead.

But even as Intuit was winning in the class-action case, that very arbitration system was being weaponized against the Silicon Valley company.

A Chicago law firm is using a novel legal strategy by bankrolling customers bringing tens of thousands of arbitration claims against Intuit. Win or lose, this strategy could cost Intuit tens of millions of dollars in legal fees alone — a threat that could prod the company to be more open to a giant settlement.

Nearly three years after ProPublica first reported on how many customers wound up paying for TurboTax when they could have filed their taxes for free, Intuit is fighting a complex set of legal battles to stop consumers from trying to recover money.

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February 26, 2022 in Tax, Tax News | Permalink

Friday, February 25, 2022

Tax Policy In The Biden Administration

Wednesday, February 23, 2022

In Tax Season, Green Isn’t The Only Color That Matters

Chicago Sun-Times, In Tax Season, Green Isn’t the Only Color That Matters:

Whiteness of WealthTax season is upon us, and Dorothy Brown has a message: Green is not the only color that matters.

She’s an Emory University professor who documents racism in American tax codes. Her book “The Whiteness of Wealth: How the Tax System Impoverishes Black Americans – and How We Can Fix it” is ground-breaking. True, Uncle Sam wants everyone’s money. But even in a system that many think is broken for myriad reasons, taxes can be punishing because of race.

Throughout the book, Brown lays out how those policies are an invisible mechanism for inequity. On the surface, most people don’t think taxes discriminate. Taxes are seen as color-blind, but they affect housing, jobs and higher education. All of which contribute to the racial wealth gap.

Brown went into tax law thinking she could escape race. As a Black woman, she quickly learned otherwise. Brown first came to this work when she did her parents’ taxes and understood that the concept of “horizontal equity” was incorrect. ...

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February 23, 2022 in Tax, Tax News | Permalink

U.S. Tax Court's Tax Trailblazers: Chief Judge Roger Gregory

U.S. Tax Court's Diversity & Inclusion Series, Tax Trailblazers: Mentoring the Next Generation:

Roger-l-gregoryPlease join the United States Tax Court as its Tax Trailblazers series continues with Chief Judge Maurice B. Foley interviewing Chief Judge Roger L. Gregory of the United States Court of Appeals for the Fourth Circuit today at 7:00-8:15 PM EST (register here). 

Chief Judge Roger Gregory is the first African American to sit on the United States Court of Appeals for the Fourth Circuit. He was nominated to the Court by President William J. Clinton on June 30, 2000. Judge Gregory was re-nominated by President George W. Bush and confirmed by the Senate for a lifetime appointment to the Court.

Judge Gregory earned his BA, summa cum laude, from Virginia State University and his JD from the University of Michigan Law School. He holds honorary degrees from Virginia Union University, Virginia State University, Virginia Commonwealth University, Widener University, Saint Paul’s College, and The American University.

Judge Gregory began his legal career as an associate with the firm of Butzel, Long, Gust, Klein & Van Zile in Detroit, Michigan. He later associated with the firm of Hunton & Williams in Richmond, Virginia. In 1982, he formed the law firm of Wilder & Gregory with L. Douglas Wilder. Upon Wilder’s election as Governor of Virginia, Gregory became managing partner of Wilder & Gregory. He served as managing partner and head of the litigation section of the firm until his appointment to the bench.

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February 23, 2022 in Legal Ed News, Legal Education, Tax, Tax News | Permalink

Tuesday, February 22, 2022

Shaviro: Tanking In Professional Sports As A Mirrleesean Optimal Tax Problem

Daniel Shaviro (NYU), Tanking in Professional Sports as a Mirrleesean Optimal Tax Problem:

In the current baseball lockout, the players are rightly focused on the problem of tanking, while the owners are oddly verging on indifferent to it. ...

[In the current system,] draft position depends on your won-lost record, in the inverse. ... [A] bad team ... actually wants to lose each game it can (or should want to, from an incentives standpoint). Sophisticated fans also want it to lose and lose. ...

But when a team is rationally wanting to lose, and even if its fans are rationally on the same page, it diminishes the sport. ... Wanting your team to lose under the current rules does not logically require wanting there to be rules under which you will want your team to lose.

On the other hand, there is a reason for having teams with worse won-loss records get higher draft positions. This helps promote long-term equality in how well different franchises do, which I would argue is good for each of these sports on multiple grounds.

How can these points both be true? Easy. It's the classic tradeoff between incentive and distributional goals. The James Mirrlees optimal tax set-up involves a very similar problem. From a distributional standpoint, at least within the model we should 100% equalize after-tax-and-transfer resources. But this would destroy incentives to earn. So the optimal solution involves a tradeoff between the right distributional answer (100% earnings tax to fund a demogrant) and the right incentives answer (no earnings tax).

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February 22, 2022 in Tax, Tax News, Tax Scholarship | Permalink

Thursday, February 17, 2022

Hugh Ault & Diane Ring: The Ever Evolving World Of Tax

Boston College Law School Magazine, The Ever Evolving World of Tax:

Ault RingInterim BC Law Dean Diane M. Ring and Professor Emeritus Hugh J. Ault have spent decades studying taxation at home and abroad. Both have consulted to the United Nations on strengthening tax systems in developing countries. Recently, Ault saw the successful results of his work with the Organization for Economic Cooperation and Development (OECD) to establish principles for the possible application of a global minimum tax, and Ring explored the rise of the sharing economy and its implications for US tax law, as well as IRS policies and declining resources. Here they discuss some current developments and concerns in those areas.

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February 17, 2022 in Legal Education, Tax, Tax News | Permalink

Wednesday, February 16, 2022

NY Times: Accounting Firm Cuts Ties With Trump And Retracts Financial Statements

New York Times, Accounting Firm Cuts Ties With Trump and Retracts Financial Statements:

Donald J. Trump’s longtime accounting firm cut ties with him and his family business last week, saying it could no longer stand behind a decade of annual financial statements it prepared for the Trump Organization, court documents show.

The decision, which was disclosed to the company in a Feb. 9 letter from the accounting firm, comes amid criminal and civil investigations into whether Mr. Trump illegally inflated the value of his assets. The firm, Mazars USA, compiled the financial statements based on information the former president and his company provided.

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February 16, 2022 in Tax, Tax News | Permalink

Saturday, February 12, 2022

NY Times: Yale To Evaluate Policies On Donor Gifts And Influence

New York Times, Yale to Evaluate Policies on Donor Gifts and Influence:

Yale University LogoFour months after reports that the head of one its most prestigious programs had abruptly resigned, Yale University is forming a committee to review its gift policies to ensure that academic freedom would be safeguarded from undue donor influence.

The committee, whose creation was first reported by The Yale Daily News, will consist of faculty members and administrative staff selected by Yale’s president, Peter Salovey. A university spokeswoman, Karen Peart, said that Salovey “will provide more details when he announces the committee, which will be soon.”

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February 12, 2022 in Legal Ed News, Legal Education, Tax, Tax News | Permalink

Tuesday, February 8, 2022

IRS Abandons Plan To Require Taxpayers To Scan Their Face To See Their Tax Returns After Firestorm Of Criticism

Following up on last week's post, The IRS Wants To Scan Your Face:  IR-2022-27 (Feb. 7, 2022), IRS Announces Transition Away From Use of Third-Party Verification Involving Facial Recognition:  

IRS Logo 2The IRS announced it will transition away from using a third-party service for facial recognition to help authenticate people creating new online accounts. The transition will occur over the coming weeks in order to prevent larger disruptions to taxpayers during filing season.

During the transition, the IRS will quickly develop and bring online an additional authentication process that does not involve facial recognition. The IRS will also continue to work with its cross-government partners to develop authentication methods that protect taxpayer data and ensure broad access to online tools.

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February 8, 2022 in IRS News, Tax, Tax News | Permalink

Saturday, February 5, 2022

IRS Offers To Settle Cryptocurrency Case, But Taxpayer Wants Precedent That Mining/Staking Is Not A Realization Event

Press Release, Taxpayer Lawsuit Demands Confirmation of Tax Treatment of Staking Rewards:

Today, the Proof of Stake Alliance (POSA), a leading blockchain industry association, celebrated important news: as part of ongoing federal litigation (Jarrett v. United States, No. 3:21-cv-00419 (M.D. Tenn.)), the government has offered to refund plaintiff Joshua Jarrett for the taxes he paid when he created new property through staking, a sign that the IRS may no longer attempt to tax tokens created through staking moving forward. Despite this initial victory, Jarrett is refusing the refund and continuing with his case, as without such a ruling there will be nothing to prevent the IRS from challenging him again on this issue.

Jarrett paid income tax for 2019 on new tokens he created through staking. Contending that property that is created—like bread baked by a baker or a novel written by an author—is only taxed when it is sold, Jarrett filed for a refund in August 2020. The IRS ignored Jarrett's refund claim, forcing him to pursue the matter in federal court. Today, court filings reveal that the government has offered to grant this refund, an early sign suggesting that the IRS will not tax property created through staking until it is sold.

POSA, and the broad coalition it represents, applauds Jarrett's decision to continue his lawsuit. He has rejected the IRS's offer of a refund, opening up the possibility of a court ruling that will give him, and millions of other taxpayers in the same position, the ability to confidently plan for the future. The importance of this issue has been raised by many, including Coin Center, the Blockchain Association, and several Members of Congress. ...

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February 5, 2022 in IRS News, New Cases, Tax, Tax News | Permalink

Thursday, February 3, 2022

Tax-Free Inheritances Fuel America’s New $73 Trillion Gilded Age

Bloomberg, Tax-Free Inheritances Fuel America’s New $73 Trillion Gilded Age:

Almost half of all U.S. wealth transferred over the next quarter century will come from the top 1.5% of households.

Americans can expect to inherit $72.6 trillion over the next quarter century, more than twice as much as a decade ago, in the latest indication of how soaring markets are poised to bolster the next generation of the ultra-rich.

Almost half of all U.S. wealth transferred from the end of 2020 through 2045 will come from the top 1.5% of households, according to estimates from research firm Cerulli. Using trusts and other techniques, the wealthiest Americans can shield the bulk of their fortunes from the federal government’s 40% estate and gift tax levy. President Joe Biden and Democrats in Congress have so far failed in efforts to plug such loopholes and otherwise boost inheritance taxes.

Bloomberg

The growth in dynastic fortunes has become a flash point in Washington, with the advocacy group Americans for Tax Fairness warning in a reportreleased Wednesday about the “return to Gilded Age levels of wealth concentration” [Dynasty Trusts: Giant Tax Loopholes That Supercharge Wealth Accumulation].

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February 3, 2022 in Tax, Tax News | Permalink

Monday, January 31, 2022

Jeff Bezos’s $200 Million, 50-Year Naming-Rights Deal With The Smithsonian Does Not Include A ‘Morals Clause’

MarketWatch, Exclusive: Jeff Bezos’s $200 Million, 50-Year Naming-Rights Deal With the Smithsonian Does Not Include a ‘Morals Clause’:

Smithsonian Air SpaceAmazon.com founder Jeff Bezos’s name will be displayed on a new building at the National Air and Space Museum and in several additional places throughout the Smithsonian Institution for at least 50 years in exchange for his $200 million donation.

The terms of the agreement, which MarketWatch obtained through a public-records request, do not include a “morals clause,” a provision that would allow the Smithsonian to terminate the naming rights if Bezos’s behavior brought disrepute to the institution. ...

Big-dollar donations like this one are typically trumpeted by institutions (this one was covered in major media outlets and came with an inspirational video), but the legally binding contracts that surround the gifts are usually kept private. Bezos’s gift agreement with the Smithsonian offers a rare glimpse into how institutions and their wealthy benefactors engineer a mutually beneficial exchange. ...

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January 31, 2022 in Tax, Tax News | Permalink

Saturday, January 29, 2022

The IRS Wants To Scan Your Face

Washington Post, IRS Wants to Scan Your Face:

IRS Logo 2Millions of Americans will soon have to scan their faces to access their Internal Revenue Service tax accounts, one of the government’s biggest expansions yet of facial recognition software into people’s everyday lives.

Taxpayers will still be able to file their returns the old-fashioned way; the IRS began accepting returns for 2021 earnings on Monday, encouraging electronic filing. But by this summer, anyone wanting to access their records — including details about child tax credits, payment plans or tax transcripts — on the IRS website will be required to record a video of their face with their computer or smartphone and send it to the private contractor ID.me to confirm their identity.

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January 29, 2022 in IRS News, Tax, Tax News | Permalink

Wednesday, January 26, 2022

U.S. Tax Court's Tax Trailblazers: Judge Mary Ann Cohen

U.S. Tax Court's Diversity & Inclusion Series, Tax Trailblazers: Mentoring the Next Generation:

Please join the United States Tax Court as its Tax Trailblazers series continues with Chief Judge Maurice B. Foley interviewing Judge Mary Ann Cohen, the Tax Court’s first female Chief Judge. Today at 7:00-8:15 PM EST (register here). 

Judge Mary Ann Cohen earned her undergraduate degree from the University of California at Los Angeles and her J.D. from the University of Southern California School of Law. Prior to her time on the Court, she practiced law in Los Angeles as a member of Abbott & Cohen.

Appointed by President Reagan and sworn in for her first 15-year term on September 24, 1982, Judge Cohen was reappointed by President Clinton and sworn in for her second term on November 7, 1997. She served as Chief Judge of the Court from June 1, 1996 to September 23, 1997, and from November 7, 1997 to May 31, 2000. Judge Cohen assumed senior status on October 1, 2012 and continues to perform judicial duties on recall.

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January 26, 2022 in Legal Ed News, Legal Education, Tax, Tax News | Permalink

Monday, January 24, 2022

WSJ: The Huge Tax Bills That Came Out Of Nowhere At Vanguard

Wall Street Journal, The Huge Tax Bills That Came Out of Nowhere at Vanguard:

VanguardIt’s easy for a small investor to make big mistakes. It would be even easier for giant investment firms to help prevent them—but, sadly, the asset-management industry seems to have other priorities.

Just look at what happened last month to some investors in Vanguard’s Target Retirement funds. They got whacked with huge capital-gains distributions. Those payouts triggered painful tax bills they could easily have avoided if Vanguard had simply warned them not to hold these funds outside of a tax-advantaged retirement account.

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January 24, 2022 in Tax, Tax News | Permalink

Saturday, January 15, 2022

IRS Targets Your Side Hustle In Crackdown On Transactions Over $600

Bloomberg, IRS Targets Your Side Hustle In Crackdown on Transactions Over $600:

IRS Logo 2It just got harder to hide from the IRS.

Starting this month, users selling goods and services through such popular sites as Venmo, Etsy and Airbnb will begin receiving tax forms if they take a payment of more than $600. One by one in recent months, tech giants have been warning users of the coming changes and asking them to provide tax information.

“Until this year, the threshold was much higher ($20,000 and 200 transactions) so it didn’t affect nearly as many people,” Venmo told users in its messages about the change. “This requirement only pertains to payments received for sales of goods and services and does not apply to friends and family payments.”

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January 15, 2022 in Tax, Tax News | Permalink

Friday, January 14, 2022

Americans For Tax Fairness Seeks To Hire A Tax Research & Policy Associate

Americans For Tax Fairness is seeking to hire a Tax Research & Policy Associate:

Americans For Tax Fairness (2019)POSITION SUMMARY
Americans for Tax Fairness, a coalition of national and state endorsing organizations active on high-profile federal tax reform issues, is seeking a Research & Policy Associate to provide support for research, policy and communications work and perform administrative duties. This is a full-time non-exempt position that provides a competitive salary and benefits. The Research & Policy Associate reports to the Executive Director. The salary range is $45,000 to $60,000 depending on experience. A competitive benefits package includes employer-paid health, dental, and vision insurance, 3% employer match on 401k contributions, pre-tax transportation benefits, and paid holidays, vacation, sick, and volunteer time off. ATF operates as a virtual office, but there is a possibility that this may change in a year, at which time the position might be located in Washington, D.C.

ESSENTIAL DUTIES AND RESPONSIBILITIES

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January 14, 2022 in Tax, Tax News | Permalink

Thursday, January 13, 2022

NY Times: The IRS Is Warning Of A Messy Tax Season

New York Times, The I.R.S. Is Warning of a Messy Tax Season:

IRS Logo 2The federal tax filing season will run from Jan. 24 to April 18 this year, the Internal Revenue Service said on Monday, warning in its announcement that staffing shortages and paperwork backlogs could make for a messy and frustrating experience for taxpayers.

In a briefing on Monday, Treasury Department officials said that the I.R.S. would struggle to promptly answer telephone calls from taxpayers with questions and that a lower level of service should be expected. They blamed Republican legislators, who have blocked efforts to increase funding at the agency, for the lack of resources.

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January 13, 2022 in IRS News, Tax, Tax News | Permalink

Wednesday, January 12, 2022

Morse: A Tax Deadline Missed By One Day Leads To A Supreme Court Showdown Over Equity, Jurisdiction – And Grammar

SCOTUSblog:  A Tax Deadline Missed By One Day Leads to a Showdown Over Equity, Jurisdiction – and Grammar, by Susan C. Morse (Texas; Google Scholar):

Supreme Court (2018)The argument on Wednesday in Boechler v. Commissioner of Internal Revenue will consider whether “equitable tolling” — which allows courts to excuse missed deadlines in some circumstances — is available for a statutory federal income tax deadline. The issue has split circuits, with the U.S. Courts of Appeals for the 8th and 9th Circuits concluding that tolling is not available, and the U.S. Court of Appeals for the District of Columbia Circuit concluding that tolling is available for a similarly worded tax provision. The court’s consideration of this question will address an issue of particular interest for low-income taxpayers and their advocates. It will also add to the court’s precedent on the interaction between the law of equity and the technicalities of federal statutes. Partly because of the circuit split and partly because of the statute’s lack of clarity, this could be a close case.

The dispute arose after the Internal Revenue Service assessed a $19,250 penalty and issued a notice of intent to levy to a small North Dakota law firm for failing to file employee tax withholding forms. After a hearing, the IRS issued a notice of determination sustaining the proposed levy. Under the Internal Revenue Code, the firm had a 30-day window following the issuance of the notice of determination to file a petition in the U.S. Tax Court to challenge the notice. The deadline was Aug. 28, 2017. The firm mailed its petition on Aug. 29, 2017. The question for the justices is whether the Tax Court may consider equitable tolling for this deadline; or whether the deadline is jurisdictional, which, under applicable precedent, would bar consideration of equitable tolling.

Both sides center their arguments on a test set forth in the 2015 case United States v. Kwai Fun Wong, decided 5-4, which elaborated a framework established in the 1990 case Irwin v. Department of Veterans Affairs. Under the Kwai Fun Wong test, there is a rebuttable presumption of equitable tolling for suits against the government. How can the presumption be rebutted? If the statute shows that Congress “plainly” gave the time limits “jurisdictional consequences.” Time limits are then jurisdictional and not subject to equitable tolling.

In Boechler, the court has the task of categorizing a limitation period that relates to a “collection due process” procedure. ...

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January 12, 2022 in New Cases, Tax, Tax News | Permalink

Monday, January 10, 2022

ABA Tax Section Seeks Nominations For Janet Spragens Pro Bono Award

The ABA Tax Section is soliciting nominations for the 2022 Janet Spragens Pro Bono Award:

ABA Tax Section (2021)The Tax Section pleased to announce that we are accepting nominations for the 2022 Janet Spragens Pro Bono Award given to an individual or law firm for sustained and outstanding achievements in pro bono activities in the tax law. Find the nomination form here.

The criteria for selection of an individual recipient of the award are that (i) the individual be a tax lawyer, whether living or deceased; (ii) the individual is or was a member of the Section of Taxation; and (iii) the individual has, through years of service, demonstrated an ongoing commitment to pro bono activities, particularly in the areas of federal and state taxation.

The criteria for selection of a law firm recipient are that (i) the law firm includes members of the Section of Taxation; and (ii) the law firm has, through years of service of its attorneys, demonstrated an ongoing commitment to pro bono activities, particularly in the areas of federal and state taxation.

January 10, 2022 in ABA Tax Section, Tax, Tax News | Permalink

Thursday, January 6, 2022

Grewal: Lobbying The Tax Court

Andy Grewal (Iowa; Google Scholar), Lobbying the Tax Court:

As many litigators know, federal courts often take substantial time before they rule on motions or issue their opinions. Weeks, months, or sometimes even years may pass between an argument over an issue and a court’s disposition of that issue. Parties usually have little choice but to wait.

In the U.S. Tax Court, delays may present an especially acute problem. In Tax Court trials, no jury renders an immediate verdict. The fact finders are the Tax Court judges themselves. Thus, in complex cases, the judges hold off on a decision until they can review, for example, post-trial briefs from the parties. Delays inevitably occur between the close of trial and the Tax Court’s disposition of a case.

In a recent interview, Judge Albert Lauber noted that the Tax Court has internal procedures to expedite substantially delayed cases. Judge Lauber also observed that Congress could provide a potentially helpful resource for taxpayers. The Tax Court, created by statute, depends on Congress for its funding. Thus, Judge Lauber advised, if taxpayers face something like a 6-year delay in their cases, the “best thing” would be for the taxpayers to “contact their congressmen.” Then, Congress might “contact the Chief Judge” to “express unhappiness” over the court’s delay in a matter. This approach, Judge Lauber observed, “tends to get results,” because the Tax Court would “never want Congress to be unhappy.” See Substantial Authorities: The Tax Podcast with Matt Frank, 51:10 – 52:12.

This practice apparently reflects a departure from that adopted by the Article III federal courts.

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January 6, 2022 in Tax, Tax News | Permalink

Tax: One Of The 20 Hottest Law Jobs For The Next Decade

20 Hottest Law Jobs

The 20 Hottest Law Jobs for the Next Decade, Nat'l Jurist, Fall 2021, at 18:

[I]t’s hard to predict which areas of law will become most in demand, because it’s hard to predict where society is headed. ... We turned to top experts, the three authors of Law Jobs: The Complete Guide, to get their opinions on which fields show the most promise. ... The authors are: Andrew McClurg, professor emeritus of The University of Memphis - Cecil C. Humphreys School of Law; Christine Nero Coughlin, a professor at Wake Forest University School of Law; and Nancy Levit, a professor at University of Missouri - Kansas City School of Law. They offer personal and professional advice on the 20 hottest practice areas. ...

Tax LawMartin Ginsburg, a tax lawyer, a beloved tax law professor and the [late husband of former]  Supreme Court Justice Ruth Bader Ginsburg, once famously said: “Basic tax, as everyone knows, is the only genuinely funny subject in law school.”

Tax lawyers assure us that tax law can be “genuinely funny.” While we may find that questionable, there is no question that tax law is hot. Tax lawyers help evaluate how changes in the tax law affect individuals and businesses. Given the changes to the tax code under the Trump administration and the shifting policies in the Biden administration, tax lawyers are in high demand.

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January 6, 2022 in Legal Ed News, Legal Education, Tax, Tax News | Permalink

Monday, January 3, 2022

The Top 10 Tax Posts Of 2021

Saturday, January 1, 2022

New State Business Tax Climate Index: Blue States Are Worst, Red States Are Best

Following up on Thursday's post, New U.S. Census Data: Major Migration From Blue States To Red States, which noted that 9 of the 10 states with the largest population losses voted for Joe Biden in 2020, and 8 of the 10 states with the largest population gains voted for Donald Trump:  Tax Foundation, 2022 State Business Tax Climate Index (interactive map tool):

The Tax Foundation’s State Business Tax Climate Index enables business leaders, government policymakers, and taxpayers to gauge how their states’ tax systems compare. While there are many ways to show how much is collected in taxes by state governments, the Index is designed to show how well states structure their tax systems and provides a road map for improvement.

Tax Foundation

8 of the 10 states with the worst business tax climates voted for Joe Biden in 2020, and 8 of the 10 states with the best business tax climates voted for Donald Trump.

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January 1, 2022 in Tax, Tax News, Think Tank Reports | Permalink