Paul L. Caron
Dean


Wednesday, April 8, 2020

WSJ: Companies Save Billions In Taxes By Shifting Assets Around Globe

Richard Rubin (Wall Street Journal), Companies Save Billions in Taxes by Shifting Assets Around Globe:

Multinational corporations are devising new strategies to keep their taxes low, saving billions of dollars by navigating around attempts by the U.S. and European countries to tighten the tax net.

Companies that prospered for years with low tax rates are learning how to keep them that way, even as political pressure builds to tax them more. They are doing so by moving intangible assets such as patents and trademarks between subsidiaries and across borders.The moves don’t fundamentally change a company’s operations or pretax profit, but they can generate significant new deductions that can offset income for years or ensure that income gets taxed at lower rates.

More than a dozen major U.S. companies—including ViacomCBS Inc., Gilead Sciences Inc. and Activision Blizzard Inc. —have disclosed such maneuvers, reporting total future tax savings of at least $13.6 billion, according to a review of recent securities filings that companies completed prior to the coronavirus pandemic.

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April 8, 2020 in Tax, Tax News | Permalink | Comments (0)

Tuesday, April 7, 2020

WSJ: The Tax Consequences Of Working From Home During COVID-19

Wall Street Journal Tax Report, Millions Are Suddenly Working From Home. Can They Claim a Tax Break?:

IRS CovidIf you’re one of millions of Americans who are now working from home instead of the office because of the coronavirus pandemic, count yourself lucky: you aren’t sick and you have a job.

Still, both you and your employer may be wondering whether your remote work qualifies for any tax breaks. Have you bought a desk, a better chair or new computer equipment? Can you take a tax deduction on those improvements, as well as the increased utility costs needed to power a new home-office set up?

The short answer is no, the employee can’t take these deductions—but the employer often can. As part of the 2017 tax overhaul, Congress nearly doubled the standard deduction and repealed some specific write-offs on Schedule A. One was a partial deduction for unreimbursed employee expenses such as a home office or union dues.

But employers can claim these deductions, based on reimbursements to the worker. The good news for workers is that the breaks can help employees with a range of pandemic expenses and the payments don’t count as compensation, either for income or FICA taxes. ...

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April 7, 2020 in IRS News, Tax, Tax News | Permalink | Comments (0)

Monday, April 6, 2020

Amy Monahan Named Distinguished University Professor At Minnesota

Professor Monahan Named a Distinguished McKnight University Professor:

Monahan (2020)Amy Monahan, Melvin Steen & Corporate Donors Professor and associate dean for research & planning at the Law School, has been named a Distinguished McKnight University Professor. 

The Distinguished McKnight University Professorship program honors the University’s “most distinguished and highest-achieving mid-career faculty who have …. made significant advances in their careers at the University of Minnesota, whose work and reputation are identified with the University, and whose accomplishments have brought great renown and prestige to Minnesota.”

Monahan joined the Law School faculty in Fall 2009. She teaches and writes in the areas of federal taxation and employee benefits law. Her scholarship focuses primarily on health and retirement plan regulation, and she has been actively involved in state and national efforts to improve the law in both areas. She has served on the Institute of Medicine’s Committee on the Determination of Essential Health Benefits, the independent committee charged with developing guidelines and principles for the Department of Health & Human Services to use in defining which medical treatments and services health insurance plans must cover as part of Affordable Care Act insurance reforms, and she has also advised various states regarding health care reform and implementation.

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April 6, 2020 in Tax, Tax News | Permalink | Comments (0)

Friday, April 3, 2020

Tax Policy In The Trump Administration

Tax Lawyers Can Fight The Coronavirus Crisis With The Internal Revenue Code

Bob Rubin (Boutin Jones, Sacramento), Tax Lawyers Can Fight the Coronavirus Crisis with the Internal Revenue Code:

CoronavirusUnder section 139, gross income does not include any amount received by an individual as a qualified disaster relief payment. A qualified disaster relief payment is one of four types of payments made to, or for the benefit of, an individual, but only to the extent any expense compensated by the payment is not otherwise compensated for by insurance or otherwise. The first and most relevant type of payment is any amount paid to reimburse or pay reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a qualified disaster. President Trump’s Stafford Act Declaration for New York, California and Washington made section 139 applicable.

The section 139 grants are not income to the employee/grantees, are not subject to employment taxes, are deductible by the employer/grantor and are not subject to information reporting under section 6041. The section 139 plan cannot discriminate based upon length of service or position. The grant cannot be in the nature of income replacement.

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April 3, 2020 in Tax, Tax News | Permalink | Comments (2)

Thursday, April 2, 2020

Primer On How To Navigate The Recovery Rebate This Time

Two new posts from the eminent Carl Smith explain how the current rebate refund provisions differ from two past versions, and highlight what issues to anticipate with IRS administration of the provisions. 

"So, How Will the "Recovery Rebate" Refunds Work This Time? Part I:"

Section 6428 operates as a refundable credit – just like the earned income tax credit or the additional child tax credit.  Section 6428(b).  ... Because it has been awhile since this recovery rebate credit has been in the law (and because I litigated on behalf of taxpayers the only district court and appellate court opinions addressing the 2008 version of section 6428; see Sarmiento v. United States, 812 F. Supp. 2d 137 (E.D.N.Y. 2011), aff’d in part and rev’d in part, 678 F.3d 147 (2d Cir. 2012), and Maniolos v. United States, 741 F. Supp. 2d 555 (S.D.N.Y. 2010), aff’d per order, 469 Fed. Appx. 56(2d Cir. 2012)), I thought it would be useful for me to give a practical primer on how the new recovery rebate is written, how it was administered last time, and how I think it will be administered this time – because I anticipate the IRS will make administrative choices in 2020 similar to those that the IRS made in 2008....

"So, How will the "Recovery Rebate" Refunds Work This Time? Part II:"

This post is to discuss two issues under the prior versions of section 6428 that led to litigation and how those issues have or have not been addressed by the current legislation.  The two issues are:

  1. Whether the IRS may apply the recovery rebate credits (including stimulus checks) under section 6402 to reduce certain outstanding debts; and
  2. Which taxable year is the stimulus check “for” for purposes of bankruptcy?

The answer to the first question is decidedly “no”, with one exception.

The answer to the second question is still open – at least outside the Second Circuit.

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April 2, 2020 in Bryan Camp, Tax, Tax News, Tax Practice And Procedure | Permalink | Comments (0)

Wednesday, April 1, 2020

WSJ: Pelosi May Tie Future Coronavirus Relief To Retroactive Repeal Of Limitation On State & Local Tax Deduction

Wall Street Journal editorial, Pelosi Pitches a Blue-State Bailout:

House Speaker Nancy Pelosi held up last week’s coronavirus relief bill with demands related to corporate diversity, carbon emissions and election reform. But Democrats are far from finished using the crisis to try to force through partisan priorities they couldn’t pass in normal times. Mrs. Pelosi is now hinting the price for further economic relief may include expanding a regressive tax deduction for high-earners in states run by Democrats.

On Monday Mrs. Pelosi told the New York Times she wanted Congress to “retroactively undo SALT.” In the 2017 tax reform, Republicans limited the state and local tax deduction to $10,000. That raised federal tax revenue mostly from high-tax parts of states like California, New York and New Jersey and helped pay for the rate cuts on corporate, small business and individual incomes. According to the Tax Foundation, the cap raised almost $33 billion in 2018 from those earning more than $1 million per year and had little impact for those earning less than $100,000.

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April 1, 2020 in Tax, Tax News | Permalink | Comments (2)

Avi-Yonah, Saez & Zucman: Taxes In The Time Of Coronavirus — It Is Time To Revive The Excess Profits Tax

Reuven S. Avi-Yonah (Michigan), Taxes in the Time of Coronavirus: Is it Time to Revive the Excess Profits Tax?:

At a time when most American citizens and businesses are suffering catastrophic economic damage from the Coronavirus recession, some corporations—such as Amazon, 3M, Gilead, and Zoom—are seeing their profits rise dramatically because of the pandemic.

Given that most corporations are losing money, but some are now earning enormous profits due to the crisis, it is time to revive the wartime excess profits taxes that the US deployed in World War I and World War II to prevent corporate winners from achieving this form of opportunistic unjust enrichment.

The most recent US excess profits tax was enacted shortly before the US entered World War II. It was first adopted in 1940, amended in 1941, 1942, 1943, and 1945, and repealed in 1950. ...

Given the diversity of the corporations that are likely to profit from the pandemic and the fact that most of them are not engaged in capital intensive activities, the tax should use the average earnings method based on 2016, 2017, 2018, and 2019. The rest of the World War II methodology can be applied unchanged. Thus, to use Amazon as an example, one would start with Amazon’s 2020 net income, subtract a credit for average 2016-2019 earnings plus 8% of R&D (the principal capital investment), and apply a 95% tax rate to the excess profits. The resulting tax can be reduced by credits for wages of additional employees hired in 2020 to encourage the winners to hire and pay well during the recession.

It is unconscionable that some corporations would profit from the current crisis while everyone else suffers. Moreover, the federal government will be spending trillions to save the economy, and much of this spending will benefit the winners since it will be spent on their services. There is no reason not to use this opportunity to revive the excess profit tax and apply it to profits that derive entirely from the pandemic.

New York Times op-ed:  Jobs Aren’t Being Destroyed This Fast Elsewhere. Why Is That?, by Emmanuel Saez (UC-Berkeley) & Gabriel Zucman (UC-Berkeley):

Some businesses, more broadly, will disproportionately benefit from the pandemic. While tens of thousands of brick-and-mortar stores are closed, Amazon sales rise. The Seattle-based company is one of the few S&P 500 firms whose stock price is higher today than at the beginning of the year. Cloud computing is exploding. Facebook traffic is booming.

But these windfall profits have a fair, comprehensive and transparent solution: The government should impose excess profits taxes, as it has done several times in the past during periods of crisis.

In 1918, all profits made by corporations above and beyond an 8 percent rate of return on their capital were deemed abnormal, and abnormal profits were taxed at progressive rates of up to 80 percent. Similar taxes on excessive profits were applied during World War II and the Korean War. These taxes all had one goal — making sure that no one could benefit outrageously from a situation in which the masses suffered.

To help make this happen, the next bill needs an excess profits tax. If Congress fails to act, the pandemic could well reinforce two of the defining trends of the pre-coronavirus American economy: the rise of business concentration and the upsurge of inequality.

Some will say that the solutions we’ve outlined show excessive faith in government. They will correctly point out that some of these policies are undesirable in normal times. But these are not normal times. The big battles — be they wars or pandemics — are fought and won collectively. In this period of national crisis, hatred of the government is the surest path to self-destruction.

April 1, 2020 in Tax, Tax News | Permalink | Comments (0)

Tuesday, March 31, 2020

The Tax Maven Podcast Episode 3: Do Your Taxes Like Nobody's Watching (Jeff Hoopes)

Episode 3, Do Your Taxes Like Nobody's Watching — Because Honestly, They Probably Aren't (Jeff Hoopes (University of North Carolina Kenan-Flagler Business School)):

Tax MavenEpisode Summary:  A typical consumer spends exactly zero hours a day thinking about corporate tax compliance. Jeff Hoopes, a Tax Maven who devotes approximately 100% of his time to thinking about tax as the research director of the UNC Tax Center, explains why that disconnect matters. In this Episode, he explains the power and the limits of sophisticated enforcement tools such FIN 48 and the Schedule UTP and the humble credit card. He explores whether firms that donated to a particular political party respond differently to tax breaks such as those delivered by the 2017 tax law changes. Hoopes also shows why data from corporate tax returns challenge the conventional wisdom that private companies engage in more aggressive tax planning. His Pencil Question comes from an article by Edward J. Mccaffery in the Wisconsin Law Review.

Episode Notes: Jeff Hoopes is an associate professor and the Harold Q. Langenderfer Scholar of Accounting at the University of North Carolina Kenan-Flagler Business School. Hoopes focuses on understanding how taxpayers respond to tax laws and changes in tax enforcement and uses his expertise to explain why. His work emphasizes the intersection of tax law, accounting, public economics, and finance.

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March 31, 2020 in Tax, Tax News | Permalink | Comments (0)

Monday, March 30, 2020

A Tax Prof's Day In Covid-19 America Without Child Care

Slate, A Day in America Without Child Care:

CoronavirusAs the COVID-19 pandemic shuts down day cares and schools, countless parents have been left with no child care at all. Some are trying to do their jobs remotely, while also changing diapers and helping bored teens figure out online courses and brainstorming games to distract toddlers. Some essential workers are still going in every day, while exhausted family members take on child care duties or school-age kids find ways to entertain themselves. So we picked a single weekday—last Thursday—and asked a bunch of parents all around the country to record how that stretch of time unfolded for them without child care, hour by hour. Here’s the combined timeline of their days.

8 p.m. Steven, New York, tax law professor: We play bingo with a college buddy of mine. I send her a photo of a bingo card and patch her in by video. My wife ends up winning and our son comes in second, followed by a team of stuffed animals that was also playing.

9 p.m. Steven, New York, tax law professor: Simpsons!

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March 30, 2020 in Coronavirus, Legal Ed News, Legal Education, Tax, Tax News | Permalink | Comments (0)

Friday, March 27, 2020

Tax Policy In The Trump Administration

Friday, March 20, 2020

Tax Policy In The Trump Administration

Tax Options For Economic Relief During The Coronavirus Crisis

Tax Foundation, Tax Options For Economic Relief During The Coronavirus Crisis:

CoronavirusAs policymakers consider ways to provide relief during the public health crisis and economic downturn, tax policy can provide a set of tools to increase stability for both individuals and businesses.

Instead of simply reaching for fiscal stimulus with the goal of increasing economic activity, tax policy changes can give vulnerable individuals and businesses additional liquidity and space to survive the reduction in economic activity needed in light of the coronavirus outbreak. This reduces the impact of the economic downturn and public health problem in the short term while decreasing the amount of time needed to rebound once the crisis ends. 

Each of the options below can be combined with policy proposals that provide economic support beyond the tax code and are separate from the White House proposal to suspend or cut the payroll tax. Each of these tax options have costs and trade-offs.

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March 20, 2020 in Coronavirus, Tax, Tax News | Permalink | Comments (1)

Thursday, March 19, 2020

WSJ: Tax Law Changes Make Life Harder For Firms Facing Coronavirus Losses

Wall Street Journal, Tax Law Changes Make Life Harder for Firms Facing Coronavirus Losses:

CoronavirusThe 2017 tax law is making life harder for U.S. businesses that suffer sudden losses, and Congress is under pressure to relax some of those provisions as the economy reels from the impact of the coronavirus.

To help pay for cutting the corporate tax rate, the law curtailed deductions for net operating losses and interest. The changes to loss deductions, in particular, make it harder for companies to use today’s losses against past profits and claim quick refunds for cash infusions.

The previous tax law “was a classic automatic stabilizer, helping businesses weather an economic storm,” said Martin Sullivan, chief economist at Tax Analysts, the nonprofit publisher of Tax Notes. “This is especially important now because businesses, large and small, are seeking liquidity.”

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March 19, 2020 in Coronavirus, Tax, Tax News | Permalink | Comments (0)

Tuesday, March 17, 2020

U.S. Surges Ahead As World’s Top Hotspot For The Fabulously Rich

Bloomberg, U.S. Surges Ahead as World’s Top Hotspot for the Fabulously Rich:

The U.S. is home to even more of the super-rich.

The country created the most individuals last year -- 13,443 -- with fortunes of $30 million or more, according to Knight Frank’s 2020 Wealth Report. China was second with 7,892 new ultra-high-net-worth individuals, while Japan was a distant third.

Bloomberg

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March 17, 2020 in Tax, Tax News | Permalink | Comments (0)

Monday, March 16, 2020

The IRS Proves The Left’s Favorite Economists Wrong:The Rich Really Do Not Pay Lower Taxes Than You

Wall Street Journal op-ed:  The IRS Proves the Left’s Favorite Economists Wrong, by Phillip W. Magness (American Institute for Economic Research) & Stephen C. Miller (Troy University):

‘The Rich Really Do Pay Lower Taxes Than You” read a headline in the New York Times last fall. This astounding claim, presented in the media as fact and evidence of inequities baked into President Trump’s 2017 tax cut, came from two economists at the University of California, Berkeley. Emmanuel Saez and Gabriel Zucman asserted that 2018 was the first year in U.S. history that the average tax rate on the 400 wealthiest income earners dipped below the rates paid by the lower-middle class and poor.

Finally, we had proof the rich weren’t paying their fair share. But new data from the Internal Revenue Service suggest it isn’t true.

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March 16, 2020 in Tax, Tax News | Permalink | Comments (2)

Saturday, March 14, 2020

NY Times: The Tax Code Is Overtaxed

New York Times, The Tax Code Is Overtaxed:

When a working-class divorced couple takes turns caring for the kids, who deserves a hefty income subsidy to help offset the cost?

Do the fees that college students pay to join a club or play a sport count as an education expense? What about the books they buy?

Should at-home genetic tests count as a health care expenditure worthy of a public subsidy? How about acupuncture, or massage?

These are the types of questions that, under the U.S.’s peculiar approach, fall not to elected officials, nor to the agencies in charge of family welfare, education and health care. Rather, they are the province of the Internal Revenue Service.

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March 14, 2020 in Tax, Tax News | Permalink | Comments (0)

Friday, March 13, 2020

The Tax Maven Podcast Episode 2: Tax Policy And The 14th Century Fresco (Miranda Stewart)

Episode 2, Tax Policy and the 14th Century Fresco (Miranda Stewart (Melbourne Law School)):

Tax MavenEpisode Summary: Melbourne’s Miranda Stewart has a passion for tax law that led her halfway around the world to NYU Law’s tax LLM in the late 1990s, helping launch her prolific career as a scholar. Now, Professor Stewart teaches, writes and advises governments about improving the relationship between people and their governments and the role that tax policy can play in promoting transparency. In this episode, Stewart describes the way the tax law intersects with gender, human rights, good governance and the rule of law. She also explains why she has an Italian fresco on her home page and what it says about the role tax plays in society. She answers a pencil question based on an article by UCLA’s Eric Zolt.

Episode Notes: Miranda Stewart is a professor and the director of Tax Studies and the Tax Group at Melbourne Law School and also a fellow at the Tax and Transfer Policy Institute at Australian National University’s Crawford School of Public Policy. Her scholarship addresses an extraordinary range of topics related to tax policy, including transparency and economic development.

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March 13, 2020 in Tax, Tax News | Permalink | Comments (0)

Thursday, March 12, 2020

Winners Of The 19th Annual Law Student Tax Challenge

ABA Tax Section, Winners of the 19th Annual Law Student Tax Challenge:

J.D. Division

ABA JD1st Place:
Amanda Krugler and Scott Sullivan [right, with ABA Tax Section Chair Thomas Callahan] [more here]
University of Kentucky College of Law
Coach:  Jennifer Bird-Pollan

2nd Place (Tie):
Matthew Foran and Harry Gao
Seton Hall Law School
Brian Krastev and Matthew Marcellino
Syracuse University College of Law

Best Written Submission:
Ryan Hartnett and Mitchell Renfrew
Western New England University School of Law

Semi-Finalists:
Anita Alanko and Jennifer Galstad
Catholic University of America, Columbus School of Law

Mark Watterson and Taylor Monroe
UNT Dallas College of Law

Ryan Hartnett and Mitchell Renfrew
Western New England University School of Law

LL.M. Division

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March 12, 2020 in ABA Tax Section, Legal Education, Tax, Tax News, Teaching | Permalink | Comments (0)

Wednesday, March 11, 2020

George Washington To Host Program Celebrating George Yin's Career

Program Celebrating the Distinguished Career of George K. Yin, Edwin S. Cohen Professor of Law and Taxation Emeritus, UVA:

Yin (2015)Please join us on Friday, March 13th, beginning at 11:30 a.m. in the Student Conference Center at the George Washington University Law School for luncheon and a Program celebrating the distinguished career of our colleague, George K. Yin, Edwin S. Cohen Professor of Law and Taxation Emeritus (UVA) and illustrious graduate of the George Washington University Law School. Luncheon will begin at 11:30 a.m. followed by the Program at noon.

The Program will begin with remarks by Professor Yin, followed by others.

If you will be able to attend the luncheon and Program, please RSVP to Ms. Prerna BalaEddy. The Program will be held at the GW Law Student Conference Center, located at Lisner Hall, 2d floor, 2023 F St NW, Washington, DC 20052. If you have any questions, please refer them to Karen Brown. We hope to see you at the Program!

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March 11, 2020 in Tax, Tax News, Tax Prof Moves | Permalink | Comments (1)

Monday, March 9, 2020

NY Times: Soccer Transfers And ‘Ghost Clubs’ Collide In A Tax-Fraud Case

New York Times, In Spain, Soccer Transfers and ‘Ghost Clubs’ Collide in a Tax-Fraud Case:

The luxury homes on a Spanish island and the gleaming yachts moored in Mediterranean ports were all trappings of a life well-lived.

They were also, according to the Spanish authorities, the fruits of a multimillion-dollar money laundering and tax-evasion operation controlled by one of world soccer’s most powerful soccer agents, which last month resulted in criminal indictments against the agent, Abdilgafar Fali Ramadani, and several of his associates.

According to the authorities, Ramadani was at the center of the scheme in which a group of agents connected to him were able to exploit lax regulations and hide millions of dollars in commissions by moving athletes through several so-called “ghost” clubs in Belgium, Serbia and Cyprus. By doing so, the authorities said, the agents avoided paying taxes on the payments they received for brokering the deals.

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March 9, 2020 in Tax, Tax News | Permalink | Comments (0)

Saturday, March 7, 2020

Details Of The Higher Taxes Proposed By Biden ($4 Trillion) And Sanders ($40 Trillion)

New York Times, How Democrats Would Raise Taxes on the Rich:

Biden BernieMuch divides leading Democrats on tax policy, both on the presidential campaign trail and on Capitol Hill. They disagree over whether to impose a wealth tax, on how much to tax high earners and on whether to raise taxes on the middle class in order to pay for a “Medicare for all” health care program.

But on one key theme, the leading presidential contenders and top Democrats in the Senate and House agree: If their party retakes the presidency and full control of Congress after the November election, wealthier people are likely to be paying higher taxes on their investment income.

How high those taxes would go, and how many Americans would need to pay them, would depend heavily on which Democrat won the White House.

WSJ Sanders

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March 7, 2020 in Tax, Tax News | Permalink | Comments (4)

Analysis Of The Final Opportunity Zone Regulations

Jean Bertrand, David S. Miller, Sejin Park & Sean Webb (Proskauer), The Final Regulations on Opportunity Zones:

This paper discusses the final regulations on the opportunity zone program.

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March 7, 2020 in IRS News, Tax, Tax News | Permalink | Comments (0)

Friday, March 6, 2020

Tax Policy In The Trump Administration

Trump's Taxes And Tax Returns

Thursday, March 5, 2020

Hickman: Justice Thomas, Brand X, and Baldwin

Following up on my previous post, Justice Thomas, In Lone Dissent, Thrashes Chevron and His Own Brand X Decision:  Kristin E. Hickman (Minnesota), Justice Thomas, Brand X, and Baldwin:

The Internet and academia are abuzz about Justice Thomas’s dissent from the Supreme Court’s denial of certiorari in Baldwin v. United States. Specifically, Justice Thomas called upon the Supreme Court to reconsider its 2005 decision in National Cable & Telecommunications Ass’n v. Brand X Internet Services. The Court in Brand X held that an administering agency acting with the force of law — e.g., through notice-and-comment rulemaking — may adopt an interpretation of a statute it administers that is contrary to a pre-existing circuit court decision advancing a different interpretation, and reviewing courts must in such circumstances extend Chevron deference to the agency’s reasonable, contrary interpretation, irrespective of stare decisis. The opinion for the Court in Brand X was written by none other than Justice Thomas. In his dissent from the denial of cert in Baldwin, he said, “Although I authored Brand X, it is never too late to surrender former views to a better considered position” (internal quotation marks and brackets omitted).

From what I have read in the past 36 or so hours, and the reporters with whom I have spoken, some of the reactions to Justice Thomas’s Baldwin dissent have been mixed. Much of the media coverage is behind paywalls (e.g., Bloomberg Tax), unfortunately, though not all of it is. (See, e.g.Taxprof blog.) Ultimately, your reaction to Justice Thomas’s dissent may depend upon whether or not you see Justice Thomas’s opinion as A BIG DEAL. Some people do, others do not. Please put me in the “not” camp. ...

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March 5, 2020 in New Cases, Tax, Tax News, Tax Scholarship | Permalink | Comments (0)

Wednesday, March 4, 2020

2020 ABA Tax Section Janet Spragens Pro Bono Award

Press Release, ABA Section of Taxation Awards 2020 Janet Spragens Pro Bono Award to Hardin Matthews, Kelley Miller and Larry Sannicandro:

MatthewsHardin Matthews spent an exceptional career embodying the very characteristics this award seeks to acknowledge. His dedication to low-income taxpayers is noteworthy not only for the years of service, but also for the breadth of service. After retiring from Ropes & Gray, where he performed pro bono services for clients over the many years of his career, he dedicated himself to finding ways to help low-income taxpayers. He completed a year-long fellowship with the Access to Justice Program at Greater Boston Legal Services (GBLS) and continued to volunteer after the fellowship dedicating over 3,700 hours of volunteer attorney time in just five years. He goes above and beyond in his service to taxpayers, linking them to other needed resources. In addition to achieving life-changing victories for low-income taxpayers, he is a steady source of legal research and mentorship for other attorneys both at GBLS and Harvard’s Low-Income Taxpayer Clinic (LITC). Hardin volunteers for the Volunteer Income Tax Assistance (VITA) program in Chelsea and Revere, Massachusetts. He also led a statewide advocacy project to improve the interactions of low-income taxpayers with the state revenue agency in Massachusetts.

ABA AwardKelley Miller [Reed Smith, Washington, D.C.] and Larry Sannicandro [McCarter & English, Newark ] were jointly selected to receive the Janet Spragens Pro Bono Award because in designing and implementing the Exonerees’ Tax Assistance Network, they created an entirely new form of low-income taxpayer assistance that is nothing short of extraordinary. For years, wrongfully incarcerated individuals who received compensation for their time behind bars were required to pay income taxes on the settlements they received from government organizations responsible for their wrongful incarceration. Congress changed the law in 2015 to exempt exonerees from paying income taxes on civil damages, restitution or other monetary awards received as compensation for their wrongful incarceration. Despite the passage of the Wrongful Conviction Tax Relief Act of 2015, many exonerated individuals remain unaware of their right to a refund of tax paid on their compensation, much less the applicable filing deadlines. Kelley Miller and Larry Sannicandro saw an opportunity to help people who have been significantly disenfranchised and would not otherwise have the ability to claim what is rightfully theirs.

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March 4, 2020 in ABA Tax Section, Tax, Tax News | Permalink | Comments (0)

Tuesday, March 3, 2020

WSJ: Bernie Sanders Aims New Tax Hike At Executive Retirement Plans

Wall Street Journal, Bernie Sanders Aims New Tax Hike at Executive Retirement Plans:

Sen. Bernie Sanders (I., Vt.) would sharply curb the tax benefits of executives’ retirement plans and require earlier taxation of stock options in a proposal that could dramatically alter compensation at major U.S. companies.

In a plan set to be introduced Thursday, the front-runner for the Democratic presidential nomination cited a new Government Accountability Office report [IRS and DOL Should Strengthen Oversight of Executive Retirement Plans (GAO-20-70) (Jan 28, 2020). Publicly Released: Feb 27, 2020.]. That analysis found executive deferred-pay plans at the 500 biggest publicly traded companies totaled about $13 billion in assets in 2017, just considering the top few executives at each company, or about 2,300 people.

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March 3, 2020 in Tax, Tax News | Permalink | Comments (1)

WSJ: AI Comes To The Tax Code

Wall Street Journal, AI Comes to the Tax Code:

Governments are increasingly relying on machine learning and data analytics to analyze troves of data as they seek to detect tax evasion, respond to taxpayers’ questions and make themselves more efficient. ...

The Internal Revenue Service is designing machine-built graphs to plot the relationships among participants in business deals, giving auditors a new tool to analyze transactions and detect tax avoidance. The agency is using artificial intelligence to study notes that agency employees take when fielding questions from taxpayers and testing which combinations of formal notices and contacts are most likely to get a taxpayer who owes money to send a check.

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March 3, 2020 in Tax, Tax News | Permalink | Comments (1)

Sunday, March 1, 2020

Japan’s GDP Shrinks Dramatically After A Tax Rise And A Typhoon

The Economist, Japan’s GDP Shrinks Dramatically After a Tax Rise and a Typhoon:

The EconomistEconomists still argue about the merits of Abenomics, the experimental mix of policies introduced by Japan’s prime minister, Abe Shinzo, seven years ago, in an effort to chase away deflation and stagnation. But two lessons are beyond debate. Japan’s bond market is remarkably docile despite the government’s towering debt. Japanese households, however, are painfully sensitive to increases in the consumption tax, a broad value-added tax imposed on most of their purchases. After the government raised the tax from 8% to 10% on October 1st, the economy shrank at an annual pace of 6.3% in the fourth quarter of 2019, according to figures released on February 17th (see chart ).

The tax increase was an unforced error. The government faces no immediate need for additional revenue. Despite gross debt nearing 240% of GDP, its borrowing remains absurdly cheap. The yield on a ten-year government bond is stuck at about zero, where the country’s central bank, the Bank of Japan (BOJ), has pegged it since 2016. That peg obliges the BOJ to buy as much government debt as necessary to keep long-term interest rates low. Such determined efforts to stimulate borrowing are needed chiefly because private spending has been weak—too weak, at least, to lift inflation to the boj’s target of 2% from the current 0.8%. Thus the consumption-tax rise was doubly strange. It made it even harder for firms to sell goods to Japan’s inhibited consumers, for the sake of reducing the number of bonds Japan’s government sells to a customer who has sworn to bid for them anyway. It was like adding ballast to the waterlogged side of a ship.

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March 1, 2020 in Tax, Tax News | Permalink | Comments (1)

Friday, February 28, 2020

Tax Policy In The Trump Administration

Thursday, February 27, 2020

NYU Grad Tax Program Launches The Tax Maven Podcast

The Tax Maven:

Tax MavenThe first podcast from the Graduate Tax Program at NYU Law, the Tax Maven, introduces listeners to the people and the ideas that draw so many of us to work in tax. Tax scholars learned long ago what makes tax law both powerful and deeply human. The Tax Maven features conversations with professors from a range of disciplines, revealing tax law’s connection to prosperity, poverty, and history. Each episode will feature a guest—a Tax Maven—sharing the fruits of her scholarly work in a format that will make you think, laugh, and wonder, offering an answer to the perennial question: “Why tax law?”

Episode 1, Is More Open More Fair? (Kimberly Clausing (Reed College; moving to UCLA)):
What if there were one mechanism that could support workers and communities harmed as a result of technological change; mediate the forces of the global economy; and adequately fund urgent public priorities such as education, health, and climate? In this episode, economist Kimberly Clausing stops by to talk with Steven Dean about how tax can address big challenges such as increasing inequality and growing threats to the middle class.

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February 27, 2020 in Tax, Tax News | Permalink | Comments (0)

IRS Names New National Taxpayer Advocate

Treasury and IRS Announce National Taxpayer Advocate Appointment:

Erin CollinsToday, the U.S. Treasury Department and Internal Revenue Service (IRS) announced the appointment of Erin M. Collins to serve as the National Taxpayer Advocate (NTA).

“Erin Collins will be an outstanding voice for American taxpayers,” said Secretary Steven T. Mnuchin.  “She has a wealth of experience representing a broad range of taxpayers before the IRS.  She also developed valuable expertise during her years with the Office of Chief Counsel. Erin is the ideal candidate to help the IRS modernize and improve service for American families and businesses.”

“I am deeply honored to join the talented team at the IRS as the National Taxpayer Advocate and thank Secretary Mnuchin and Commissioner Rettig for the trust they have placed in me,” said Ms. Collins.  “I will work every day to be a strong and effective representative of American taxpayers.”

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February 27, 2020 in IRS News, Tax, Tax News | Permalink | Comments (0)

NY Times: The Liberal Economists Behind The Wealth Tax Debate

New York Times, The Liberal Economists Behind the Wealth Tax Debate:

Gabriel Zucman and Emmanuel Saez have crashed the Democratic primary with their idea — and angered some economists.

One of the most liberal policy proposals animating the Democratic presidential primaries is the handiwork of two French economists who are not formally advising any campaign and have barely met the candidates running for the White House.

Gabriel Zucman and Emmanuel Saez are the driving force behind proposals for a wealth tax, an idea embraced by Senators Bernie Sanders and Elizabeth Warren as a way to reduce economic inequality by forcing the richest Americans to pay taxes on everything they own and diverting that money to public services like universal health care and free college tuition.

Their efforts documenting a sharp increase in the concentration of wealth at the very top and their outspokenness have vaulted the tax from a fringe idea in American politics to the center of a reinvigorated debate on taxing the rich.

They have also made Mr. Zucman and Mr. Saez the most visible, and polarizing, economists in the 2020 campaign.

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February 27, 2020 in Tax, Tax News | Permalink | Comments (2)

NY Times: One Guaranteed Winner In The Democratic Presidential Primary: Plans To Tax The Rich

New York Times, One Guaranteed Winner in the Democratic Primary: Plans to Tax the Rich:

The Democratic primary race remains highly unpredictable, but there is one thing we already know for sure about the party’s next presidential nominee: She or he has big plans to tax the very rich.

Every leading candidate in the party’s 2020 field — from relative moderates like Joseph R. Biden Jr.Michael R. BloombergPete Buttigieg and Amy Klobuchar to liberals like Bernie Sanders and Elizabeth Warren — has proposed trillions of dollars in new taxes on businesses and wealthy Americans. In each case, and to wildly varying degrees, the money would fund new government spending in areas like health care, education, housing and climate change, and a range of other programs meant to help the poor and the middle class.

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February 27, 2020 in Tax, Tax News | Permalink | Comments (1)

Wednesday, February 26, 2020

NY Times: Digital Tax Fight Emerges As Global Economic Threat

New York Times, Digital Tax Fight Emerges as Global Economic Threat:

The world’s top economic leaders warned on Saturday that an international tax fight between the United States and Europe poses a new threat to the global economy if a resolution is not reached this year.

After two years of economic fallout from a trade war between the United States and China, finance ministers and other senior officials at the Group of 20 meeting in Riyadh expressed alarm about an impasse over plans by foreign governments to impose new taxes on American technology companies. If a deal proves elusive in the coming months, European countries will begin collecting levies, which would probably set off retaliatory tariffs from the United States. ...

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February 26, 2020 in Tax, Tax News | Permalink | Comments (0)

Tuesday, February 25, 2020

Justice Thomas, In Lone Dissent, Thrashes 'Chevron' and His Own 'Brand X' Decision

National Law Journal, Justice Thomas, in Lone Dissent, Thrashes 'Chevron' and His Own 'Brand X' Decision:

Justice Clarence Thomas on Monday sharply criticized his own majority opinion in a 15-year-old telecommunications case and an underlying decision that says courts must give deference to agencies interpreting their own regulations, urging his colleagues to reconsider both rulings.

Thomas wrote alone in an 11-page dissent that said the Supreme Court should have agreed to review the tax case Baldwin v. United States. The Baldwin petition, arriving from the U.S. Court of Appeals for the Ninth Circuit, had asked the justices outright to overrule Thomas’s 2005 decision in National Cable & Telecommunications Assn. v. Brand X Internet Services, a regulatory case that said a federal agency had correctly interpreted the Communications Act of 1934.

Thomas used the Baldwin case to raise and advance his concerns about his prior Brand X decision, and the underlying doctrine called “Chevron deference,” a bedrock part of administrative law that says courts generally adopt agencies’s views, if reasonable, of their rules. That deference has drawn criticism from conservatives members of the court, but no justice has moved to overturn the 1984 ruling.

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February 25, 2020 in Tax, Tax News | Permalink | Comments (1)

New Tool Examines How U.S. Taxes And Spending Affect Income Inequality

Economic Policy Institute, New Tool Examines How U.S. Taxes and Spending Affect Income Inequality:

EPIToday, the Economic Policy Institute is launching a website aimed at shedding light on how the U.S. tax and spending system affects household income up and down the income distribution.

The U.S. Tax & Spending Explorer allows users to take a deep dive into the ways that the federal government affects the inequality of households’ incomes through taxes and through spending on social insurance and safety net programs. The explorer also examines so-called “tax expenditures,” sometimes referred to as the hidden federal budget. ...

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February 25, 2020 in Tax, Tax News, Think Tank Reports | Permalink | Comments (1)

Saturday, February 22, 2020

The Limits Of Nudging: Why Can't California Get People To Take Free Money?

NPR Planet Money, The Limits Of Nudging: Why Can't California Get People To Take Free Money?:

EITC CA 2The Earned Income Tax Credit supplements incomes through the tax code, awarding thousands of dollars each year primarily to low-wage workers with kids. But there's a problem: a huge population of eligible workers fails to file their taxes and get the money each year.

Several years ago, the state of California established their own state EITC (CalEITC) on top of the federal one. Depending on how many kids they have and how much they earn, a Californian who files for both the state and federal credit can get upwards of $6,000. For the poorest households with kids, those tax credits could almost double their household income. There's a lot of money on the table to help the most at-risk families in the state, and California policymakers have grown concerned about the large number of eligible workers failing to file taxes and claim their credits.

In 2018, the state of California and the California Policy Lab, an interdisciplinary think tank of scholars from various University of California schools, started trying to solve this problem, and they commissioned one of the most fascinating experiments in "nudging" we've seen in a while.

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February 22, 2020 in Tax, Tax News | Permalink | Comments (7)

Friday, February 21, 2020

Tax Policy In The Trump Administration

Thursday, February 20, 2020

Journalist’s Resource Guide To The 2020 Democratic Policy Proposals: Carbon Taxes

Journalist's Resources Guide to the 2020 Democratic Policy Proposals: Carbon Taxes:

JR2In the lead-up to the 2020 elections, the Journalist’s Resource team is combing through the Democratic presidential candidates’ platforms and reporting what the research says about their policy proposals. We want to encourage deep coverage of these proposals — and do our part to help deter horse race journalism, which research suggests can lead to inaccurate reporting and an uninformed electorate. We’re focusing on proposals that have a reasonable chance of becoming policy. For us, that means at least 3 of the 5 top-polling candidates say they intend to tackle the issue. Here’s what the research says about carbon pricing.

Candidates Favoring Carbon Pricing

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February 20, 2020 in Tax, Tax News, Think Tank Reports | Permalink | Comments (0)

Tuesday, February 18, 2020

Vanderbilt Seeks To Hire A Tax Prof

Vanderbilt seeks applicants for a full-time tenured or tenure-track position in the tax law area at the entry or lateral levels:

Vanderbilt (2020)We are considering applicants who specialize in one or more subfields of tax law, broadly defined. Applicants should possess strong academic and professional qualifications. Lateral applicants must have a substantial record of legal scholarship and effective teaching skills. The final candidate for this position must successfully complete a background check.

Qualifications
Ideal candidate will possess strong academic and professional qualifications and be able to teach across legal fields and at the intersection of law and other academic disciplines.  Lateral applicants must have a substantial record of legal scholarship and effective teaching skills. ...

Application Instructions

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February 18, 2020 in Tax, Tax News, Tax Prof Jobs | Permalink | Comments (2)

Monday, February 17, 2020

WSJ: Facebook And IRS Prepare For $9 Billion Tax Court Fight

Following up on my previous post, Who’s Afraid Of The IRS? Not Facebook.:  Wall Street Journal, Facebook and IRS Prepare for $9 Billion U.S. Tax Court Fight:

FacebookFacebook and the Internal Revenue Service will square off in a U.S. Tax Court case that could cost the social-media giant more than $9 billion and shape the government’s ability to crack down on companies’ efforts to shift profits to low-tax countries.

The trial slated to start in the week ahead caps a nine-year dispute over how Facebook structured its international operations. The IRS argues that more of the company’s profits should have been taxed at higher rates in the U.S., rather than in the company’s Irish subsidiary. Facebook contends that it deserves a refund.

Facebook’s practice of routing overseas profits to low-tax countries is common among U.S. multinationals, which have faced criticism in the U.S. and in Europe for not paying enough in taxes. The case could set the rules of the road for others with similar disputes in the pipeline.

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February 17, 2020 in New Cases, Tax, Tax News | Permalink | Comments (2)

Sunday, February 16, 2020

Tennessee's Four Dean Finalists Include Kansas Dean (And Tax Prof) Stephen Mazza

Tennessee

University of Tennessee, College of Law Announces Dean Candidates:

Professor Joan Heminway (Feb. 24)
University of Tennessee College of Law
CVBio

Associate Dean for Diversity and Inclusion Susan Kuo (Feb. 26)
University of South Carolina School of Law 
CVBio

Dean Stephen Mazza (Feb. 27)
University of Kansas College of Law
CVBio

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February 16, 2020 in Legal Ed News, Legal Education, Tax, Tax News, Tax Prof Moves | Permalink | Comments (0)

Saturday, February 15, 2020

House Holds Hearing On The Disappearing Corporate Tax

The House Ways and Means Committee held a hearing on Tuesday on The Disappearing Corporate Income Tax with these witnesses:

House LogoJason Furman (Harvard), Testimony:

  1. Corporate tax collections are very low both in historical perspective and compared with other countries. This contributes to the overall low level of revenue.
  2. The 2017 tax law (Public Law 115-97) is a major reason for this revenue loss, with its total cost likely to be even larger than was estimated when the law originally passed.
  3. There is no evidence that the 2017 tax law has made a substantial contribution to investment or longer-term economic growth. In fact, business investment growth has
    slowed to nearly a halt while economic growth has been propped up by increases in government spending.
  4. Going forward, a well-designed business tax reform could both increase revenue and encourage more investment and innovation.

Rebecca Kysar (Fordham), Testimony:

  1.  TCJA has failed to live up to its promise of broadening the tax base on the foreign income of multinational corporations, which was the quid pro quo for a lower corporate tax rate.
  2. Treasury has weakened these already generous features of TCJA in the face of intense lobbying for business interests, which will further erode the U.S. tax base. Troublingly, many of these regulatory giveaways have no statutory basis

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February 15, 2020 in Congressional News, Tax, Tax News | Permalink | Comments (1)

NY Times: A Rare Trump-Era Climate Policy Hits An Obstacle: The Tax Man

New York Times, A Rare Trump-Era Climate Policy Hits an Obstacle: The Tax Man:

A rare policy enacted under President Trump to address climate change has run into an unexpected hurdle: the tax man.

In 2018, Congress approved a lucrative tax break for companies that use carbon capture technology to trap carbon dioxide produced by industrial sites before the gas escapes into the atmosphere and heats the planet. The technology is still costly and contentious, but may one day become a valuable tool for slowing global warming. House Republicans are aiming to expand support for carbon capture as part of a broader package of climate bills, the first of which is expected Wednesday.

At least a dozen carbon capture projects, potentially representing billions of dollars in investments, have been announced since Congress passed its 2018 tax break. But two years later, those plans remain blocked because the Internal Revenue Service has yet to explain how, exactly, companies can claim the tax credit that would make the projects viable.

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February 15, 2020 in Tax, Tax News | Permalink | Comments (1)

Friday, February 14, 2020

Tax Policy In The Trump Administration

Trump's Taxes And Tax Returns

Samantha Galvin Named Director Of Denver Tax Clinic

Professor Samantha Galvin Named Director of Low Income Taxpayer Clinic:

GalvinThe University of Denver Sturm College of Law announced Samantha Galvin, associate professor of the practice of taxation, as the new director of University of Denver Low Income Taxpayer Clinic (LITC).

Professor Galvin joined the Denver Law faculty in 2013, having previously received her JD and LLM in Taxation from the University of Denver, clerked on the U.S. Tax Court and worked as an associate at an employee-benefits and executive-compensation consulting firm. In addition to teaching the Graduate Tax Program, she currently writes for a prominent blog, Procedurally Taxing, that addresses developments in the U.S. Tax Court.

Galvin also served as assistant director of LITC, working closely with students and clients, prior to taking the director role. “Serving as director is just an amazing opportunity, and I’m thrilled the university believed in me to fill this role. I’m excited for the challenge,” Galvin said.

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February 14, 2020 in Tax, Tax News, Tax Prof Moves | Permalink | Comments (0)

Thursday, February 13, 2020

IRS Whistleblower Awards Fall 61%