UC-San Francisco Hosts Conference On U.S. International Tax Rules: Options For Change

UC-San Francisco hosts a conference on Complexities, Discontinuities, and Unintended Consequences of U.S. International Tax Rules: Options for Change today (registration): 

An east coast version of this conference was organized by the American Enterprise Institute and the University of Florida and was held in June 17-18, 2024 in Washington, D.C. More information about that conference can be found here. This west coast version of the conference will focus on the international tax provisions most relevant to technology- and intangibles-based enterprises.

Welcome 

• Mindy Herzfeld (Florida) 
• Heather Field (UC-San Francisco; Google Scholar) 

Session #1: Taxing of CFC Earnings – GILTI and Subpart F

The panelists will explore design issues of Subpart F income and GILTI, their differences, and opportunities for harmonization post TCJA.

• Kara Mungovan (Davis Polk), Subpart F and GILTI Recommendations, 115 Tax Notes Int'l 729 (July 29, 2024) 
• Gretchen Sierra (Deloitte) (commentator)
• Brian Jenn (McDermott) (commentator) 

Session #2: Foreign Tax Credit

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Natelson: Direct Taxes And The Founders’ Originalism

Rob Natelson (Montana), Direct Taxes and the Founders’ Originalism:

Professor Donald Drakeman’s response to my essay on direct and indirect taxes presents an opportunity to offer some background on constitutional originalism.

My thesis was that the longstanding uncertainty over the Constitution’s distinction between direct and indirect taxes persists because probative Founding-era evidence continues to be overlooked. In addition to references in eighteenth-century literature, that evidence consists of (1) uncontradicted comments by participants in the ratification debates which mesh well with (2) a plethora of eighteenth-century British and American direct tax statutes. (Detailed citations can be found here and here.)

These sources tell us that direct taxes include capitations and levies on real and personal property (i.e., wealth), income, and occupations. Indirect taxes (duties) include levies on consumption of domestically-sold goods (excises), customs (exactions on imports and exports), and levies on certain other transactions and events.

Professor Drakeman’s response cited his 2013 co-authored article on the 1796 Supreme Court case of Hylton v. United States.

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Updated 2024 Tax Prof Rankings: Google Scholar H-Index Since 2019

Yesterday, I posted Google Scholar H-Index All rankings of the Top 129 tax professors with Google Scholar pages (data collected on September 3). The Google Scholar H-Index Since 2019 rankings are below. If you are a full-time law school tax professor with a Google Scholar page and we missed including you, please contact me.

Rank	Name	School	Google Scholar H-Index (Since 2019)
1	Joel Slemrod	Michigan	56
2	Alan Auerbach	UC-Berkeley	43
3	James Hines	Michigan	33
4	Reuven Avi-Yonah	Michigan	29
5	Kimberly Clausing	UCLA	25
5	Dhammika Dharmapala	UC-Berkeley	25
7	Jacob Goldin	Chicago	23
8	David Weisbach	Chicago	22
9	Daniel Hemel	NYU	21
10	Kristin Hickman	Minnesota	20
11	Edward McCaffery	USC	18
11	Dan Shaviro	NYU	18
11	Robert Sitkoff	Harvard	18
14	Brian Galle	Georgetown	17
14	Leandra Lederman	Indiana (Maurer)	17
14	Eric Zolt	UCLA	17
17	Kyle Logue	Michigan	16
18	Yariv Brauner	Florida	15
18	Zachary Liscow	Yale	15
18	Kyle Rozema	Northwestern	15
21	Bridget Crawford	Pace	14
21	Nancy Knauer	Temple	14
21	Diane Ring	Boston College	14
24	David Gamage	Missouri (Columbia)	13
24	Andrew Hayashi	Virginia	13
24	Ruth Mason	Virginia	13
24	Lloyd Hitoshi Mayer	Notre Dame	13
24	Lawrence Zelenak	Duke	13
29	Hugh Ault	Boston College	12
29	Dorothy Brown	Georgetown	12
29	Jonathan Choi	USC	12
29	Rebecca Kysar	Fordham	12
29	Sarah Lawsky	Northwestern	12
29	Omri Marian	UC-Irvine	12
29	Shu-Yi Oei	Duke	12
29	Chris Sanchirico	Penn	12
29	Darien Shanske	UC-Davis	12
29	Michael Simkovic	USC	12
29	David Walker	Boston Univ.	12
40	Steven Bank	UCLA	11
40	Joshua Blank	UC-Irvine	11
40	Jacob Cogan	Cincinnati	11
40	Clifton Fleming	BYU	11
40	Ajay Mehrotra	Northwestern	11
40	Susan Morse	Texas	11
40	Stephen Shay	Boston College	11
47	John Brooks	Fordham	10
47	Samuel Brunson	Loyola-Chicago	10
47	Kathleen Delaney Thomas	North Carolina	10
47	Victor Fleischer	UC-Irvine	10
47	Nancy McLaughlin	Utah	10
47	Leigh Osofsky	North Carolina	10
47	James Repetti	Boston College	10
47	Linda Sugin	Fordham	10
55	Ellen Aprill	Loyola-L.A.	9
55	Jordan Barry	USC	9
55	Leslie Book	Villanova	9
55	Ari Glogower	Northwestern	9
55	Christine Hurt	SMU	9
55	Jay Soled	Rutgers	9

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Derenoncourt Presents Wealth Of Two Nations: The US Racial Wealth Gap, 1860-2020 Today At NYU

Ellora Derenoncourt (Princeton; Google Scholar) presents Wealth of Two Nations: The US Racial Wealth Gap, 1860-2020 (online appendix) (with Chi Hyun Kim (University of Bonn), Moritz Kuhn (University of Mannheim; Google Scholar) & Moritz Schularick (Kiel Institute, Sciences Po Paris; Google Scholar)) at NYU today as part of its Tax Policy and Public Finance Colloquium hosted by Daniel Shaviro:

The racial wealth gap is the largest of the economic disparities between Black and white Americans, with a white-to-Black per capita wealth ratio of 6 to 1. It is also among the most persistent. In this article, we construct the first continuous series on white-to-Black per capita wealth ratios from 1860 to 2020, drawing on historical census data, early state tax records, and historical waves of the Survey of Consumer Finances, among other sources. Incorporating these data into a parsimonious model of wealth accumulation for each racial group, we document the role played by initial conditions, income growth, savings behavior, and capital returns in the evolution of the gap. Given vastly different starting conditions under slavery, racial wealth convergence would remain a distant scenario, even if wealth-accumulating conditions had been equal across the two groups since Emancipation. Relative to this equal-conditions benchmark, we find that observed convergence has followed an even slower path over the past 150 years, with convergence stalling after 1950. 

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Updated 2024 Tax Prof Rankings: Google Scholar H-Index All

Below are the updated Google Scholar H-Index All rankings of the Top 114 U.S. tax professors with Google Scholar pages (data collected on September 3). If you are a full-time law school tax professor with a Google Scholar page and we missed including you, please contact me.

Rank	Name	School	Google Scholar H-Index (All)
1	Joel Slemrod	Michigan	99
2	Alan Auerbach	UC-Berkeley	96
3	James Hines	Michigan	66
4	Reuven Avi-Yonah	Michigan	39
5	David Weisbach	Chicago	38
6	Dan Shaviro	NYU	35
7	Dhammika Dharmapala	UC-Berkeley	33
8	Edward McCaffery	USC	31
9	Kimberly Clausing	UCLA	30
10	Brian Galle	Georgetown	28
10	Eric Zolt	UCLA	28
12	Kristin Hickman	Minnesota	27
12	Kyle Logue	Michigan	27
12	Lawrence Zelenak	Duke	27
15	Jacob Goldin	Chicago	26
15	Chris Sanchirico	Penn	26
15	Robert Sitkoff	Harvard	26
18	Daniel Hemel	NYU	25
18	Nancy Knauer	Temple	25
20	Steven Bank	UCLA	23
20	Leandra Lederman	Indiana (Maurer)	23
22	Dorothy Brown	Georgetown	21
22	Diane Ring	Boston College	21
24	Richard Kaplan	Illinois	20
24	Nancy McLaughlin	Utah	20
24	David Walker	Boston Univ.	20
27	Yariv Brauner	Florida	19
28	Ellen Aprill	Loyola-L.A.	18
28	Bridget Crawford	Pace	18
28	Clifton Fleming	BYU	18
28	David Gamage	Missouri (Columbia)	18
28	Ruth Mason	Virginia	18
33	Paul Caron	Pepperdine	17
33	Anthony Infanti	Pittsburgh	17
33	Lloyd Hitoshi Mayer	Notre Dame	17
33	Richard Pomp	Connecticut	17
33	Darien Shanske	UC-Davis	17
33	Jay Soled	Rutgers	17
39	Hugh Ault	Boston College	16
39	John Coverdale	Seton Hall	16
39	Victor Fleischer	UC-Irvine	16
39	Ajay Mehrotra	Northwestern	16
39	Shu-Yi Oei	Duke	16
39	Gregg Polsky	Georgia	16
39	James Repetti	Boston College	16
46	Jacob Cogan	Cincinnati	15
46	Sarah Lawsky	Northwestern	15
46	Zachary Liscow	Yale	15
46	Omri Marian	UC-Irvine	15
46	Kyle Rozema	Northwestern	15
46	Stephen Shay	Boston College	15
46	Linda Sugin	Fordham	15
53	Joshua Blank	UC-Irvine	14
53	Bradley Borden	Brooklyn	14
53	Andrew Hayashi	Virginia	14
53	Christine Hurt	SMU	14
53	Linda Jellum	Idaho	14
53	Henry Ordower	St. Louis	14
53	Michael Simkovic	USC	14

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The Moores Lost Their Claim And Moore

Lily Batchelder (NYU), Ari Glogower (Northwestern; Google Scholar), Chye-Ching Huang (NYU), David Kamin (NYU), Rebecca Kysar (Fordham; Google Scholar), Kelsey Merrick (NYU), Darien Shanske (UC-Davis; Google Scholar) & Thalia Spinrad (NYU), The Moores Lost Their Claim and Moore, 184 Tax Notes Fed. 1509 (Aug. 19, 2024): 

In this article, the authors analyze the logic of Moore and argue that in many important ways, the decision undercuts attempts to sharply limit Congress’s taxing power.

Conclusion
The Moores’ counsel and some of their amici are urging that the opinion be read to tacitly rule out wealth taxes, mark-to-market taxes, and perhaps even impose a constitutional realization requirement, despite the fact the opinion explicitly disclaims doing any of those things. After all, that would turn their loss into a win. But the Court expressly declined to decide these questions.

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Morriss: The Impact Of International Financial Centers

Andrew P. Morriss (Texas A&M; Google Scholar), The Impact of International Financial Centers (Aug. 27, 2024), in Defending Globalization: Economics (Cato Institute):

Just as there is a global market for cell phones and wheat, there is also a global market for law. That may seem strange to many people, since they don’t think about buying law the same way they think about buying goods and other types of services, but law is as much the subject of a global market as those are. Indeed, many things we do in day-to-day life include laws from outside the communities where we live and work. If you have a credit card, you’ve likely agreed that the law of a state other than the one you live in governs any disputes that you have with the bank that issued it (often South Dakota). If you own stock in a Fortune 500 company, your rights as a shareholder are likely governed by Delaware law, where most large US public companies are incorporated. If your 401(k) plan includes a fund that invests in corporate bonds, the fund’s rights (and so yours) are likely governed by New York law.

Foreign legal systems probably affect your life as well. Many hospitals in the United States are insured through insurance companies incorporated in the Cayman Islands, a British Overseas Territory in the Caribbean that is better known to most people for its beaches and scuba diving than for providing insurance to health care providers. The extended warranty you bought on an appliance could be funded through a Turks & Caicos Islands company, another British Overseas Territory. And any insurance policy you buy from a US insurer is likely reinsured through a Bermuda-based (yet another British Overseas Territory!) reinsurer.

All of these are examples of the results of jurisdictional competition, which is the competition among jurisdictions to persuade people to bring legal business to them. The international version of this competition is little different from the domestic American version. In our federal system, states compete for economic activities by offering legal and business environments to attract entrepreneurs. Attractions include business courts (to speed resolution of disputes), business entities laws that cut the transaction costs of creating new businesses, low taxes, better infrastructure, and dozens more features of a business climate that are calculated to appeal to entrepreneurs. The main difference between the international competition for business and the domestic one is that in the former case, jurisdictions are primarily competing through their legal systems for the legal residence of businesses, while in the latter, states are trying to secure a physical presence of employers.

Many of the jurisdictions that are internationally successful in this the law market are small ones with some affiliation (past or present) with the United Kingdom. These jurisdictions are variously called “tax havens” (a term that was originally meant to conjure up a refuge from taxes, but became a slur intended to suggest they were cheating other places out of tax revenue); “offshore financial centers” (since many are islands); and, now, “international financial centers.” Depending on how you count, there are two to four dozen successful IFCs around the world, including independent countries such as the Bahamas, Liechtenstein, Malta, and Mauritius; territories affiliated with Britain, such as Bermuda, the Cayman Islands, Gibraltar, Guernsey, Jersey, and the Isle of Man; and the Cook Islands, which are in free association with New Zealand. As this partial list suggests, IFCs are present around the globe. What exactly do they do?

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The Top Five New Tax Papers

There is a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new paper debuting on the list at #2.

1. [1470 Downloads]  Of Losing Citizenship, Tropes, and Missed Opportunity, by Laura Snyder (Association of Americans Resident Overseas)
2. [325 Downloads]  Non-(Fully) Harmonised Excise Taxes and Irrebuttable Presumptions, by Rita de la Feria (Leeds; Google Scholar) 
3. [295 Downloads]  Tax Regulations After Loper Bright, by Andy Grewal (Iowa; Google Scholar)
4. [267 Downloads]  International Tax Scholarship and International Tax Activism, by Wolfgang Schön (Max Planck) (reviewed by Young Ran (Christine) Kim (Cardozo; Google Scholar) here)
5. [240 Downloads]  Flow-Through Entities and the OECD Pillar Two, by Leopoldo Parada (Kings College; Google Scholar)

Editor's Note:  If you would like to receive a daily email with links to tax posts on TaxProf Blog, email me here.

Weekly SSRN Tax Article Review And Roundup: Narotzki Reviews Escajeda's Bad Tax Policy Breeds Bad Blood Between Songwriters And Poets

This week, Doron Narotzki (Akron; Google Scholar) reviews an article by Hilary G. Escajeda (Mississippi College; Google Scholar), Bad Tax Policy Breeds Bad Blood Between Songwriters and Poets 183 Tax Notes Fed. 1625 (May 27, 2024).

Escajeda offers a compelling and thought-provoking critique of the U.S. tax system's treatment of artists, an area that is not often discussed. With a lively and accessible writing style, Escajeda highlights an important but often overlooked disparity in how tax policy favors songwriters over poets. Using popular cultural references, such as Taylor Swift’s music, the article skillfully engages readers while discussing the more technical aspects of tax law which makes the topic relatable and easier to digest.

Escajeda’s main argument is clear and very persuasive: current U.S. tax laws offer preferential capital gains treatment to songwriters but at the same time subject poets and other non-musical artists to ordinary income tax rates. 

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Next Week’s Tax Workshop

Tuesday, September 10: Ellora Derenoncourt (Princeton; Google Scholar) will present Wealth of Two Nations: The US Racial Wealth Gap, 1860-2020 (online appendix) (with Chi Hyun Kim (University of Bonn), Moritz Kuhn (University of Mannheim; Google Scholar) & Moritz Schularick (Kiel Institute, Sciences Po Paris; Google Scholar)) as part of the NYU Tax Policy and Public Finance Colloquium. If you would like to attend, please contact Daniel Shaviro. 

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Satterthwaite Presents Taxing Nannies Today At Florida

Emily Satterthwaite (Georgetown; Google Scholar) presents Taxing Nannies (with Ariel Jurow Kleiman (USC; Google Scholar) & Shayak Sarkar (UC-Davis; Google Scholar)) (reviewed by Michelle Layser (San Diego; Google Scholar) here and by Susan Morse (Texas; Google Scholar) here) at Florida today as part of its Tax Colloquium hosted by Yariv Brauner:

Nannies in the U.S. work long hours for low wages and risk retaliation if they complain. Informal, or “off the books,” work exacerbates their precarity, keeping it secret from state and federal tax agencies, as well as employment and labor agencies. Yet we have little understanding of how nannies navigate the tax reporting that renders them formal or informal.

This Article investigates nannies’ preferences for or against formal employment and tax reporting, the reasons behind such preferences, and how such preferences inform nannies’ relationships with their employers and legal institutions more broadly. The Article employs a multi-method research approach that includes an original and innovative survey of nannies and an analysis of nannies’ tax-related posts on the online forum Reddit. To supplement this research, the Article also discusses interviews with fifteen subject-matter experts regarding industry norms, common challenges nannies face, and policy reforms.

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Oxford Hosts Conference Today On Reimagining Global Tax Governance

The Oxford University Centre for Business Taxation hosts a conference on Reimagining Global Tax Governance today: 

Session #1: Goals of Global Tax Organisations 

• John Vella (Oxford) (chair)
• Mindy Herzfeld (Florida), Global Tax Governance: Models for International Tax Coordination
• Alice Pirlot (Geneva Graduate Institute), International Organisations & Tax Law Making
• Ivan Ozai (York University; Google Scholar) (discussant)

Session #2: Decision Making in Global Tax Organization

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Tax Presentations At Society Of Legal Scholars Annual Conference

U.S. Tax Prof presentations at the Society of Legal Scholars' Annual Conference at the University of Bristol:

Alex Zhang (Emory; Google Scholar), Fiscal Autonomy and the Legacy of Imperialism:

Within the United States, two subnational governments have distinctive powers to tax: Native tribes and U.S. territories. Native tribes can tax their own members and the commercial activities of non-Indian actors on reservations. The Supreme Court has grounded this power in both tribal sovereignty and the federal objective of fostering tribal self-governance. But its jurisprudence—in the form of preemption, plenary power, and tax doctrine—has hollowed out the Native tax base, forcing tribes to compete fiercely with Congress, states, and localities for revenue. By contrast, the U.S. territories face no tax competition. Their residents are generally exempt from federal income and estate taxes, and Congress has even delegated to some territories the authority to deviate from federal income-tax rules. Pursuant to this delegation, Puerto Rico has enacted a host of tax incentives to attract the ultra-wealthy to migrate from the mainland, fueling accusations of tax shelter and settler colonialism. The divergent tax treatment of Native and territorial communities paradoxically rests on the same rationale: fiscal autonomy.

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Call For Tax Papers And Panels: Law & Society Annual Meeting

Neil Buchanan has issued his annual call for tax papers and panels for next year's annual meeting of the Law & Society Association in Chicago, Illinois (May 22 - 25, 2025):

The Law & Society Association (LSA) will host its next annual meeting from May 22 - 25, 2025, in Chicago, Illinois.  For the 21st year in a row (so we're now of legal drinking age in the US), I am organizing sessions for the "Law, Society, and Taxation" group (Collaborative Research Network 31).  And for what is now the ninth year in a row, I am delighted to be working with Professors Jennifer Bird-Pollan and Mirit Eyal-Cohen as co-organizers of our conference-within-a-conference.

Under our signatures below, I've copied the Call for Papers email that LSA sent earlier this week.  Note that all sessions in Chicago will again be entirely live.

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Maynard Presents Penalizing Precarity Today At UC-San Francisco

Goldburn P. Maynard, Jr. (Indiana-Kelley; Google Scholar) presents Penalizing Precarity, 123 Mich. L. Rev __ (2024) (with Clinton Wallace (South Carolina; Google Scholar)), at UC-San Francisco today as part of its Tax Speaker Series hosted by Heather Field:

Retirement policy in America is oriented around 401(k) plans and other employer-sponsored savings plans, which together will receive a whopping $1.5 trillion in tax subsidies over the next decade. This Article uncovers a harmful flaw in the policy governing withdrawals made prior to reaching retirement age: an unnoticed gap between the rules governing plan distributions and the rules imposing penalties on employees in certain situations. Employees are generally required to seek approval from their plan administrator to receive a “hardship distribution.” These requests are granted for employees who face an “immediate and heavy financial need,” such as eviction or an unexpected medical expense. However, even with this approval, these distributions are frequently subject to an “early withdrawal penalty,” under a separate regime that is not coordinated with the hardship distribution rules.

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Lesson From The Tax Court: Form Trumps Substance On Phantom S Corp Income

This past June, the Supreme Court issued an opinion in Moore v. United States, 144 S.Ct. 1680 (June 20, 2024).  There, the taxpayers were shareholders of an American-controlled foreign corporation called KisanKraft and were being taxed on a portion of the corporation’s income that had been earned long ago and far away but never actually passed on to them substantively.  The unhappy taxpayers protested that Congress could not constitutionally tax them on income they had not realized through actual receipt.  To them it was phantom income.  Form could not, constitutionally, trump substance.

In explaining why the taxpayers were wrong, Justice Kavanaugh reviewed how Congress has historically chosen to make the owners of certain business entities responsible for paying tax on the entity’s income, regardless of what the entity actually does with that income.  He also reviewed how courts have routinely upheld that Congressional choice.

Today’s lesson is an example of that routine application of Congressional choice.  It also carries a cautionary lesson for taxpayers: choose your business partners carefully!  You do not want to go into business with Gru and Dru.  In James J. Maggard and Szu-Yi Chang v. Commissioner, T.C. Memo. 2024-77 (Aug. 7, 2021) (Judge Holmes), Mr. Maggard was a 40% shareholder of an S Corporation controlled by two other shareholders who, over the course of several years “made unauthorized distributions to themselves in excess of their proportionate ownership shares.” Op. at 1.  Judge Holmes translates this into plain English: they looted the corporation.  While the looting gave the taxpayer an argument to avoid taxation, it was not a winning argument.

Sad details below the fold.

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The Top Five New Tax Papers

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

1. [1468 Downloads]  Of Losing Citizenship, Tropes, and Missed Opportunity, by Laura Snyder (Association of Americans Resident Overseas)
2. [229 Downloads]  International Tax Scholarship and International Tax Activism, by Wolfgang Schön (Max Planck) (reviewed by Young Ran (Christine) Kim (Cardozo; Google Scholar) here)
3. [227 Downloads]  Flow-Through Entities and the OECD Pillar Two, by Leopoldo Parada (Kings College; Google Scholar) 
4. [222 Downloads]  Shaping Preferences With Pigouvian Taxes, by Gary Lucas, Jr. (Texas A&M; Google Scholar)
5. [221 Downloads]  Tax Regulations After Loper Bright, by Andy Grewal (Iowa; Google Scholar)

Editor's Note:  If you would like to receive a daily email with links to tax posts on TaxProf Blog, email me here.

Hoffer: Disaster! Tax Legislation In Crises

Stephanie Hoffer (Indiana-McKinney; Google Scholar), Disaster! Tax Legislation in Crises, 57 U.C. Davis L. Rev. 1721 (2024):

Congress cuts and pastes in times of crisis. This Article, a study of tax legislation passed in response to natural disasters and national crises during the years 2000–2020, documents and examines Congress’s use of recurring provisions from one disaster relief bill to the next. Of 272 individual statutes included in the study, Congress drew 200 from prior legislation. Far from being cabined, as they appeared when passed, these recurring tax relief statutes affected taxpayers over a broad geography throughout the entire twenty-year study period. Data also shows that recurring provisions tended to expand in scope over time. Many required taxpayers who claimed them either to hold assets or to expend resources in socially favored ways, affording relief to those who already had means. 

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Taxing Contractual Complexity

Michael Simkovic (USC; Google Scholar) & Meirav Furth-Matzkin (Tel-Aviv University), Taxing Contractual Complexity, 26 U. Pa. J. Bus. L. 189 (2024): 

Consumers rarely understand contracts offered by sellers. It does not make sense for consumers to invest in understanding these contracts because they are typically complex, time and attention are limited, and the value at stake is often low. Because consumers don’t understand contracts and information sharing among consumers is costly, sellers can profit by drafting contracts that harm consumers more than they benefit sellers. Sellers who would like to offer efficient contracts face competitive pressures not to do so because consumers who do not understand contracts cannot appreciate the benefits. Ideally, contracts would be simpler and easier to understand, but regulators don’t know the optimal complexity for each contract. Sellers know the value of the contract, but do not internalize the costs of complexity. To the contrary, sellers can benefit from making contracts more complex than necessary to obscure anti-consumer terms.

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Next Week’s Tax Workshops

Tuesday, September 3: Goldburn P. Maynard, Jr. (Indiana-Kelley; Google Scholar) will present Penalizing Precarity, 123 Mich. L. Rev. ___ (2024) (with Clinton Wallace (South Carolina; Google Scholar)) as part of the UC-San Francisco Tax Speaker Series. If you would like to attend, please contact [email protected]. 

Friday, September 6: Emily Satterthwaite (Georgetown; Google Scholar) will present Taxing Nannies (with Ariel Jurow Kleiman (Loyola-L.A.; Google Scholar), Shayak Sarkar (UC-Davis; Google Scholar)) (reviewed by Michelle Layser (San Diego; Google Scholar) here) as part of the Florida Tax Colloquium. If you would like to attend, please contact Yariv Brauner. 

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Kim Presents Algorithmic Tax Ownership At Vanderbilt

Young Ran (Christine) Kim (Cardozo; Google Scholar) presented Algorithmic Tax Ownership (with Dmitry Erokhin (International Institute for Applied Systems Analysis; Google Scholar)) at Vanderbilt yesterday as part of its Law School Faculty Workshop Series:

Ownership for tax purposes is distinct from ownership under property or contract law, as it looks beyond mere form to the economic substance of the transaction to identify who must bear the tax burdens and reap the tax benefits. Tax ownership is essential in determining the tax consequences of complex transactions, yet it is notoriously convoluted. Neither Congress nor the IRS has provided taxpayers with a clear formula for identifying tax ownership. Rather, courts have been left to develop their own methods, resulting in a complex “patchwork of rules that appear to lack a unifying principle (or set of principles).” An example is the twenty-six factors in Frank Lyon Co. v. United States.

This paper offers clearer guidance on the relevant importance of factors in tax ownership analysis using machine learning.

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Reforming The Taxation Of Life Insurance

Ari Glogower (Northwestern; Google Scholar) & Andrew Granato (J.D.-Ph.D. Candidate, Yale; Google Scholar), Reforming the Taxation of Life Insurance, 44 Va. Tax Rev. __ (2025):

The purpose of life insurance was once to provide financial protection to “widows and orphans” upon an untimely death. Now, wealthy investors also use it to avoid paying taxes. Thanks to federal tax benefits for life insurance, insurers now market policies designed explicitly as vehicles for tax avoidance, with insurance protection as an afterthought.

Well-advised taxpayers accomplish this disappearing tax trick through a “cash value” policy. These policies contain an internal savings balance, which over time can transform the policy from an insurance product into an investment account that can still qualify for insurance tax exemptions. No other investment form—even explicitly tax-preferred savings vehicles like IRAs—offers the same combination of tax benefits with minimal restrictions. In the new market for life insurance, the current rules increasingly operate as a subsidy to the rich, invite abusive planning, and can obstruct broader capital income tax reforms.

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Morse: How Late Is Too Late To Challenge Old Tax Regs?

Susan Morse (Texas; Google Scholar), How Late Is Too Late to Challenge Old Tax Regs?, 184 Tax Notes Fed. 1235 (Aug. 12, 2024):

In this report, Morse examines the six-year default limitations period for claims against the federal government, which the government can invoke to defend against administrative procedure challenges and other claims in tax cases.

Conclusion
How late is too late to challenge old tax regs? Corner Post, a recent Supreme Court case, adopts a plaintiff-specific approach for ultra vires substantive challenges. But for procedural challenges, it invites the government to argue that the applicable six-year limitations period of 28 U.S.C. section 2401(a) accrues when a regulation is promulgated. This limitations period would have barred recent challenges to old regulations in cases like Valley Park Ranch and 3M — if the government had raised it. Going forward, the government should regularly raise the six-year time bar as an affirmative defense. It should be prepared for the possibility of equitable tolling counterarguments. It should also waive the time bar in some cases to allow reasonable opportunity for procedural challenges, for instance if a claim concerns a tax return filed before the six-year mark and by a taxpayer in existence when the regulation was promulgated.

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Administrative Procedures As Tax Enforcement Tools

Wei Cui (British Columbia; Google Scholar), Jeffrey Hicks (Toronto; Google Scholar) & Michael Wiebe (British Columbia), Administrative Procedures as Tax Enforcement Tools: 

We study how common administrative procedures affect firm tax evasion. We begin with the counter-intuitive observation that many firms bunch above, rather than below, large notches in China’s corporate income tax. Cross-sectional patterns suggest that administrative procedures in the prepayment and refund system served as de facto enforcement tools that prevented some firms from accessing the reduced tax rates below the notches. Following a regulatory reform that eliminated these procedures, bunching below the notches increased dramatically. The results imply a trade-off between reducing administrative barriers and allowing much taxpayer non-compliance in low-compliance environments.

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Sanchirico & Shuldiner: Deferring Income With Tiered And Circular Partnerships

Chris William Sanchirico (Penn; Google Scholar) & Reed Shuldiner (Penn), Deferring Income with Tiered and Circular Partnerships:

By phasing entities’ taxable years in tiered and circular partnership structures, taxpayers can indefinitely defer tax with minimum complexity and friction. Existing rules restricting a partnership’s choice of taxable year based on partners’ taxable years are ill-adapted to handle tiering and circularity.  Even strengthening such rules so that they look through tiers of partnerships would do little to temper the deferral opportunity. More drastic measures are required if Congress and Treasury wish to effectively limit these opportunities.

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Grewal: Tax Regulations After Loper Bright

Andy Grewal (Iowa; Google Scholar), Tax Regulations After Loper Bright, 2025 Mich. St. L. Rev. ___ : 

After decades of uncertainty, the Supreme Court, in Mayo v. United States, finally resolved a conflict over the proper deference standard for tax regulations. The Chevron doctrine, not the National Muffler doctrine, would govern whether a tax regulation properly interpreted a statute.

This period of calm would last for only a little over a decade. Through Loper Bright, the Court has now killed any form of judicial deference to agency regulations. Loper Bright upsets not only Chevron, but nearly a century’s worth of tax-specific precedents that extended deference to Treasury regulations.

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The Top Five New Tax Papers

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

1. [1467 Downloads]  Of Losing Citizenship, Tropes, and Missed Opportunity, by Laura Snyder (Association of Americans Resident Overseas)
2. [220 Downloads]  Shaping Preferences With Pigouvian Taxes, by Gary Lucas, Jr. (Texas A&M; Google Scholar)
3. [187 Downloads]  The Conflictual Core Of Global Tax Cooperation, by Diane Ring (Boston College; Google Scholar) & Shu-Yi Oei (Duke; Google Scholar) (reviewed by Blaine Saito (Ohio State; Google Scholar) here)
4. [180 Downloads]  Nondelegation, Original Meaning, and Early Federal Taxation: A Dialogue With My Critics, by Nicholas Parrillo (Yale)
5. [161 Downloads]  Populism And Taxation, by Doron Narotzki (Akron; Google Scholar) & Tamir Shanan (College of Management; Google Scholar), 

Editor's Note:  If you would like to receive a daily email with links to tax posts on TaxProf Blog, email me here.

Miss-Stake By IRS: Proof-of-Stake's Underinclusive Regulatory Guidance

Jack H. Duncan (J.D. 2024, USC), Miss-Stake By IRS: Proof-of-Stake's Underinclusive Regulatory Guidance, 97 S. Cal. L. Rev. 537 (2024):

Death and taxes are the two certainties of life, and for some, the former may be more conceptually pleasant than the latter. To allay some of that unpleasantness, this Note uses the IRS’s guidance (or lack thereof) on the taxation of new types of digital currencies to provide a basic conceptual understanding of how tax law is formed. “Staking rewards,” which is income derived from new types of digital currencies, have sparked debate over when it should be taxed. However, such ambiguity has failed to elicit a clear response from the IRS.

It is understandable why this area of law feels convoluted to many. Unlike other disciplines, tax law is not judge-made law. Therefore, tax law often lacks clear natural-language holdings from case law. Instead, it is applied either statutorily (under the Internal Revenue Code) or administratively (through regulations, notices, and letters from the IRS). This Note illustrates that in many instances, our tax system is not as convoluted or ambiguous as it is appears.

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Weekly SSRN Tax Article Review And Roundup: Kim Reviews Schön's International Tax Scholarship And International Tax Activism

This week, Young Ran (Christine) Kim (Cardozo; Google Scholar) reviews a recent article by Wolfgang Schön (Max Planck), International Tax Scholarship and International Tax Activism (August 2024).       

While writing a scholarly article, tax scholars sometimes develop an idea based on their personal experience or political stance in addition to a pure scientific, doctrinal analysis. What are the merits of inviting activism to tax scholarship? Is there any limitation? Wolfgang Schön (Max Planck)'s recent article, International Tax Scholarship and International Tax Activism, provides insightful answers to this question, focusing on recent international tax debate.  

The international tax community over the last couple of decades has experienced dynamic changes in focus. Prior to the late 20th century, legal scholars loved to discuss complex cases (like triangular cases on withholding taxation and entity classification) and treaty analysis at a high level.

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The Mysteries Of NFT Taxation And The Problem Of Crypto Asset Tax Evasion

Amy Q. Nguyen (J.D. 2023, SMU), Comment, The Mysteries of NFT Taxation and the Problem of Crypto Asset Tax Evasion, 25 SMU Sci. & Tech. L. Rev. 323 (2022): 

Cryptocurrencies have long captured the attention of the financial world, revolutionizing how the world does business by providing virtually costless transactions. More recently, however, a new digital token has taken its place on the world stage. Known as NFTs, non-fungible tokens have allowed for the reinvention of modern finance infrastructure consisting of sophisticated trading and loaning systems for different asset types. Despite cryptocurrencies’ and NFTs’ novelty and popularity, they are not immune to the U.S. Tax Code. The Internal Revenue Service (IRS) has provided guidance on the tax framework of cryptocurrencies, but the taxation of NFTs is still relatively unclear, leaving taxpayers to rely largely on the cryptocurrency tax framework to address NFT taxation. 

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NIMBY Charities

Lauren Rogal (Vanderbilt), NIMBY Charities, 56 Conn. L. Rev. 749 (2024): 

Neighborhood organizations often advocate for land use policies and decisions that curtail development and entry into the neighborhood. This “not in my backyard” (NIMBY) disposition echoes a long history of exclusionary activity by these organizations and reflects a broader tendency to operate in furtherance of property values and other private interests. Due to substantive and procedural deficiencies in federal tax policy, these organizations often operate as 501(c)(3) tax-exempt charities, a status rightly reserved for organizations that generate broad public benefits. 

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SSRN Tax Professor Rankings

SSRN has updated its monthly ranking of 750 American and international law school faculties and 3,000 law professors by (among other things) the number of paper downloads from the SSRN database.  Here is the new list (through August 1, 2024) of the Top 25 U.S. Tax Professors in two of the SSRN categories: all-time downloads and recent downloads (within the past 12 months):

		All-Time			Recent
1	Reuven Avi-Yonah (Michigan)	235,201	1	Jonathan Choi (USC)	22,115
2	Daniel Hemel (NYU)	135,034	2	Amy Monahan (Minnesota)	12,679
3	David Gamage (Missouri-Columbia)	129,675	3	Reuven Avi-Yonah (Michigan)	12,008
4	Dan Shaviro (NYU)	129,413	4	Zachary Liscow (Yale)	5,831
5	Lily Batchelder (NYU)	128,564	5	Kristin Hickman (Minnesota)	5,638
6	Darien Shanske (UC-Davis)	121,656	6	David Gamage (Missouri-Columbia)	4,323
7	David Kamin (NYU)	115,341	7	Daniel Hemel (NYU)	4,175
8	Cliff Fleming (BYU)	109,263	8	Bridget Crawford (Pace)	4,172
9	Manoj Viswanathan (UC-SF)	105,340	9	Kim Clausing (UCLA)	3,809
10	Ari Glogower (Northwestern)	105,084	10	Darien Shanske (UC-Davis)	3,720
11	Rebecca Kysar (Fordham)	104,670	11	D. Dharmapala (UC-Berkeley)	3,504
12	D. Dharmapala (UC-Berkeley)	54,562	12	Brad Borden (Brooklyn)	3,422
13	Michael Simkovic (USC)	50,775	13	Louis Kaplow (Harvard)	3,225
14	Louis Kaplow (Harvard)	44,151	14	Robert Sitkoff (Harvard)	3,052
15	Paul Caron (Pepperdine)	42,434	15	Jordan Barry (USC)	2,942
16	Bridget Crawford (Pace)	41,078	16	Michael Simkovic (USC)	2,712
17	Jonathan Choi (USC)	40,849	17	David Weisbach (Chicago)	2,644
18	Richard Ainsworth (Boston Univ.)	40,412	18	Ruth Mason (Virginia)	2,601
19	Robert Sitkoff (Harvard)	35,738	19	Kyle Rozema (Northwestern)	2,585
20	Brad Borden (Brooklyn)	34,536	20	Brian Galle (Georgetown)	2,456
21	Amy Monahan (Minnesota)	33,750	21	John Brooks (Fordham)	2,240
22	Ruth Mason (Virginia)	32,904	22	Ellen Aprill (Loyola-L.A.)	2,234
23	Vic Fleischer (UC-Irvine)	31,261	23	Young Ran (Christine) Kim (Cardozo)	2,221
24	Kim Clausing (UCLA)	30,927	24	Richard Ainsworth (Boston Univ.)	2,151
25	Ed Kleinbard (USC)	30,422	25	Dan Shaviro (NYU)	2,089

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Update: Florida Tax Review Symposium On Moore v. United States

Following up on my previous post, Florida Tax Review Call For Papers: Symposium On Moore v. United States:  From David Hasen (Florida; Google Scholar):

I bring you a brief update on our upcoming symposium on Moore v. U.S.

The symposium will take place on Friday, Nov. 1, and Saturday, Nov. 2, 2024. We will also have an informal conference dinner on Thursday, Oct. 31. Kindly note the following:

1. The deadline for paper submissions has been extended to September 15.
2. We have expanded the scope of the symposium to include papers on Loper Bright and Corner Post, two decisions also handed down last term that have significant implications for the federal tax system. Papers focusing on either (or both) of these cases may be on any topic as long as it bears on some aspect of the federal tax system.

Submissions need not be in final form, but they should be well developed. They should not exceed 20,000 words in length (though we may make exceptions); 12,000 to 15,000 words preferred.

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Kaplan: Analyzing The New Planning Opportunities In SECURE 2.0 For Retirement Plan Participants

Richard L. Kaplan (Illinois; Google Scholar), Analyzing the New Planning Opportunities in SECURE 2.0 for Retirement Plan Participants, 32 Elder L.J. 93 (2024):

This article examines and analyzes six major changes enacted by the SECURE 2.0 Act of 2022 pertaining to current plan participants in retirement plans. Those changes relate to: (1) increased contribution limits for 60-year-old employees, (2) longevity annuities, (3) charitable gift annuities, (4) long-term care insurance, (5) unused funds in section 529 college savings plans, and (6) emergency withdrawals. These provisions vary considerably in their connection to the principal purpose of employer-provided retirement plans – namely, to finance the retirement of affected employees. 

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Gamage & Glogower: The Policy And Politics Of Alternative Minimum Taxes

David Gamage (Missouri-Columbia; Google Scholar) & Ari Glogower (Northwestern; Google Scholar), The Policy and Politics of Alternative Minimum Taxes, 77 Nat’l Tax J. 467 (2024):

This essay contributes to a literature offering qualified justifications for Alternative Minimum Tax (AMT) structures. We conclude that there is a narrow case for justifying AMTs even from the social planner perspective and that the proposed Billionaire’s Minimum Income Tax satisfies that narrow case. Next, incorporating governance collective action problems and electoral political constraints, we conclude that these considerations support a broader case for justifying AMTs that potentially also supports both preference-disallowance AMTs and the new corporate alternative minimum tax enacted in 2022.

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Issues Concerning Section 2056(d) Of The Tax Code

M. Chalmers Middleton II (Merline & Meacham), Issues Concerning Section 2056(d) of the Tax Code, 75 S.C. L. Rev. 391 (2023):

The Estate Tax Marital Deduction currently provides an unlimited deduction against estate taxes for any bequest to a surviving spouse. However, Section 2056(d) disallows the use of this deduction when the surviving spouse is not a United States citizen. This is unless the bequest is put into a Qualified Domestic Trust for the benefit of the surviving foreign spouse. 

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The Top Five New Tax Papers

This week's list of the Top 5 Recent Tax Paper Downloads is the same as last week's list.

1. [1,467 Downloads]  Of Losing Citizenship, Tropes, and Missed Opportunity, by Laura Snyder (Association of Americans Resident Overseas)
2. [449 Downloads]  Sweeping Changes and an Uncertain Legacy: The Tax Cuts and Jobs Act of 2017, by William Gale (Brookings Institution; Google Scholar), Jeffrey Hoopes (North Carolina; Google Scholar) & Kyle Pomerleau (American Enterprise Institute) (reviewed by Sloan Speck (Colorado; Google Scholar) here)
3. [314 Downloads]  Wealth Taxes Under the Constitution: An Originalist Analysis, by David Schizer (Columbia) & Steven Calabresi (Northwestern) (reviewed by Mirit Eyal-Cohen (Alabama; Google Scholar) here)
4. [214 Downloads]  Shaping Preferences With Pigouvian Taxes, by Gary Lucas, Jr. (Texas A&M; Google Scholar)
5. [175 Downloads]  Nondelegation, Original Meaning, and Early Federal Taxation: A Dialogue With My Critics, by Nicholas Parrillo (Yale)

Editor's Note:  If you would like to receive a daily email with links to tax posts on TaxProf Blog, email me here.

Weekly SSRN Tax Article Review And Roundup: Eyal-Cohen Reviews Weisbach's An APA For Tax

This week, Mirit Eyal-Cohen (Alabama; Google Scholar) reviews a new work by David A. Weisbach (Chicago; Google Scholar), An APA For Tax.

The Administrative Procedure Act (APA) is a cornerstone of administrative law in the United States, providing a framework for the procedures and processes that federal agencies must follow. Its relevance to tax law has become increasingly significant as tax administration faces new challenges and reforms. This Article is one more piece in a series of articles, where scholars supporting tax exceptionalism (e.g. Caron, Lederman, Puckett, Weisbach, Walace, Zelenak, and others) debate anti-tax exceptionalism colleagues (e.g. Abreu & Greenstein, Hickman, Hoffer, Johnson, Infanti, Walker, and others) on the question of whether Treasury (and the IRS as its extension) violates the requirements of administrative law as laid out by the APA.  

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July's Tax Reflections With Reuven Avi-Yonah

Reuven S. Avi-Yonah (Michigan; Google Scholar):

Taxing the Superrich After Moore, 184 Tax Notes 61 (July 1, 2024): 

Avi-Yonah proposes how to tax the wealthiest members of society in a constitutional manner in the wake of the Moore v. United States decision.

Taxation With Realization After Moore, 184 Tax Notes 69 (July 1, 2024):

Avi-Yonah considers the future of challenges to the realization requirement in light of the U.S. Supreme Court’s recent decision in Moore v. United States.

Should Large Corporate Mergers Be Subsidized?, 184 Tax Notes 295 (July 8, 2024): 

Avi-Yonah examines the history of tax-free corporate reorganizations.

Preventing Inversions, 184 Tax Notes 509 (July 15, 2024): 

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Florida Tax Review Publishes New Issue

The Florida Tax Review has published Vol. 26, No. 2 (Spring 2023):

• Noah Smith-Drelich (Chicago-Kent; Google Scholar), Food Tax Substitution Effects, 26 Fla. Tax Rev. 1 (2023) 
• Beverly Moran (Vanderbilt), How Federal Government Policy Helped Create Retirement Insecurity, 26 Fla. Tax Rev. 56 (2023) 
• Daniel J. Hemel (NYU; Google Scholar), The Passthrough Entity Tax Scandal, 26 Fla. Tax Rev. 87 (2023) 
• Edward J. McCaffery (USC; Google Scholar), The Paradox of Taxing the Rich, 26 Fla. Tax Rev. 130 (2023) 

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Journal Of Economic Perspectives Symposium: The Tax Cuts And Jobs Act Of 2017

Symposium, The Tax Cuts And Jobs Act Of 2017, 38 J. Econ. Persp. 3-136 (2024): 

William G. Gale (Brookings Institution; Google Scholar), Jeffrey L. Hoopes (North Carolina; Google Scholar) & Kyle Pomerleau (American Enterprise Institute), Sweeping Changes and an Uncertain Legacy: The Tax Cuts and Jobs Act of 2017, 38 J. Econ. Persp. 3 (2024) (reviewed here by Sloan Speck (Colorado; Google Scholar)): 

The Tax Cuts and Jobs Act (TCJA) of 2017 introduced sweeping changes to individual and corporate taxation. We summarize the major provisions, trace the origins of the Act, and compare it to previous tax changes. We also examine the effects on the government budget, economic activity, and distribution of resources. Based on evidence through 2019, we find that the TCJA clearly raised federal debt and increased after-tax incomes, disproportionately increasing incomes for the most affluent. Its effects on GDP and median wages seem modest at best, although clear counterfactuals are difficult to identify. The impact on investment is less certain, and research is only recently emerging that addresses this question. Empirical analysis of longer-term effects may prove difficult due to the disruptions created by the COVID-19 pandemic starting in 2020.

Jon Bakija (Williams College; Google Scholar), The US Individual Income Tax: Recent Evolution and Evidence, 38 J. Econ. Persp. 33 (2024):

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Haneman: Tax Sheltering Death Care

Victoria J. Haneman (Creighton; Google Scholar), Tax Sheltering Death Care: 

Death is not free. Funeral, burial, or cremation costs are the third largest category of expense over the lifetime of the average American, while poverty paradoxically remains the fourth leading cause of death. Many are unable to shoulder the often-exorbitant cost of death care without being forced to beg, borrow, or simply abandon human remains. Sufficient resources exist to ensure that everyone is laid to rest with dignity in the United States, but those resources are not evenly distributed. This is a conversation about affordable and humane disposition of remains as a right versus a privilege. It is a discussion made more difficult because several underlying issues are colliding in one space: consumer behavior is aberrational because of a desire to render death invisible; the funeral industry has an outsized voice in its own regulation; there are no reliable and broadly accessible death care prepayment instruments; and, expanding the (arguably inadequate) social safety net in the U.S. is usually an idea that meets with resistance. 

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Delmotte: Redistribution Without Romance

Charles Delmotte (Michigan State; Google Scholar), Redistribution without Romance: 

Various tax scholars advocate for higher taxes on the wealthy to curb their influence on public policy. This "political economic" case for redistribution has recently gained extra traction through the Law and Political Economy (LPE) movement. While both tax and non-tax scholars defer to the tax system to implement higher taxes on the wealthy and reduce their political influence, the current literature lacks a comprehensive model of how this system operates. 

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Grimmelmann Reviews Lawsky's Coding the Code: Catala And Computationally Accessible Tax Law

James Grimmelmann (Cornell; Google Scholar), When Law Is Code (JOTWELL) (reviewing Sarah B. Lawsky (Northwestern; Google Scholar), Coding the Code: Catala and Computationally Accessible Tax Law, 75 S.M.U. L. Rev. 535 (2022)):

Sarah B. Lawsky’s Coding the Code: Catala and Computationally Accessible Tax Law offers an exceptionally thoughtful perspective on the automation of legal rules. It provides not just a nuanced analysis of the consequences of translating legal doctrines into computer programs (something many other scholars have done), but also a tutorial in how to do so effectively, with fidelity to the internal structure of law and humility about what computers do and don’t do well.

Coding the Code builds on Lawsky’s previous work on formal logic and its advantages for statutory interpretation. (Formal logic, sometimes called “symbolic” or “mathematical” logic, involves the precise and rigorous analysis of symbolic expressions representing arguments, such as “p & ¬q” to mean “p is true and q is not true”.) In her 2017 A Logic for Statutes, [21 Fla. Tax Rev. 60 (2017) (reviewed by Alice Abreu (Temple) & Richard Greenstein (Temple) here),] she observed that many statutory provisions have a characteristic structure: rules subject to exceptions. A typical rule says that WHEN certain conditions are satisfied, THEN certain consequences follow, UNLESS one of several exceptions applies. Exceptions have exceptions of their own: interest payments are deductible, unless they are personal, unless they are mortgage payments.

Lawsky’s great insight about law and logic is that this characteristic structure of nested exceptions is most naturally modeled using a branch of formal logic called “default logic.” 

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Crime And The EITC

Brigham Brau (North Carolina), Jeffrey L. Hoopes (North Carolina; Google Scholar), Junyoung Jeong (North Carolina; Google Scholar) & Mark H. Lang (North Carolina; Google Scholar), Crime and the EITC:

We examine the effects of an annual government social safety net payment on crime by leveraging geographic and intertemporal variation in the magnitude and timing of earned income tax credit (EITC) payments, combined with crime micro-data. We find that drug-related crimes increase somewhat whereas burglary and robbery decrease substantially within three weeks following peak EITC payments. Non-economic crimes, such as arson and sexual offenses, remain unchanged. Leveraging additional temporal variation in EITC disbursements induced by the PATH Act in 2017 confirms our findings. ...

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Truth, Justice, And Taxation: Towards An Ethical Framework For Tax Practitioners

Joshua Cutler (Boise State; Google Scholar), Truth, Justice, and Taxation: Towards an Ethical Framework for Tax Practitioners:

Uniquely, tax practitioners have dual ethical duties, both to the taxpayer-client and to the tax system. They protect the integrity of our voluntary tax system by ensuring that clients comply with the law, but they must also help clients minimize their legal tax liability. When tax law is ambiguous, as it often is, practitioners must decide how far they may go to interpret it in the client's favor. The professional responsibility standards provide little practical help in navigating this ethical dilemma. Instead, penalty provisions in the Internal Revenue Code set the parameters for taking uncertain positions, but these rules lack principles to guide their implementation and do not address other ethical dilemmas. This article seeks to fill this void and articulate for the first time an ethical framework for tax practitioners. 

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Weisbach: An APA For Tax

David A. Weisbach (Chicago; Google Scholar), An APA For Tax: 

Recent Supreme Court cases threaten to upend the administrative law applicable to the tax system. Loper Bright eliminates Chevron deference. Ohio v. EPA heightens the scrutiny given to regulatory preambles. And Corner Post effectively eliminates the statute of limitations for challenging the validity regulations. A number of lower court decisions move in the same direction, aggressively using administrative law to invalidate guidance. Combined, these decisions threaten to make issuing guidance much more difficult and to slow the guidance process.

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Where Is The Wall Of Separation Between Direct And Indirect Taxes?

Donald Drakeman (Notre Dame), Where is the Wall of Separation Between Direct and Indirect Taxes?:

Rob Natelson’s essay, “The Constitutional Line on Direct Taxes,” concludes that the Supreme Court’s decisions involving direct and indirect taxes have been “conflicting, uncertain—and wrong.” Those decisions may have been conflicting and uncertain, but whether they are wrong is a more complicated question.

He urges us to do a deep dive into “eighteenth-century tax vocabulary and … contemporaneous tax laws” to identify a clear and consistent understanding of these terms. Joel Alicea and I did just that a few years ago [The Limits of New Originalism, 15 U. Pa. J. Const. L. 1161 (2013)], and we focused on the carriage tax upheld in the landmark 1796 Hylton case. This was the Court’s first exercise of judicial review, and it is well worth reading, not least because we discovered that “the case was trumped up, the facts were bogus, the procedure was defective, and the Court lacked a quorum.”

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The New Potential Regulatory Death Of Aggressive Captive Insurance

Beckett Cantley (Northeastern) & Geoffrey Dietrich (Cantley Dietrich), The New Potential Regulatory Death of Aggressive Captive Insurance, 75 S. C. L. Rev. 343 (2023): 

The aggressive micro-captive insurance company industry is at severe risk of decimation. The Internal Revenue Service (IRS) initially issued Notice 2016-66 to designate certain micro-captives as transactions of interest, which allowed the IRS to garner information about a micro-captive to measure if it is an abusive tax shelter. However, Notice 2016-66 was overly broad in scope, forcing participants of non-abusive micro-captives to waste time and money on sending information to the IRS that the IRS never deserved to obtain. Therefore, certain taxpayers brought challenges to Notice 2016-66, and it was overturned in CIC Services, LLC v. Internal Revenue Service following a U.S. Supreme Court opinion allowing the challenge to proceed. In the end, the death knell for the Notice was the IRS’s failure to properly follow the Administrative Procedure Act (APA) when issuing the Notice, as well as the arbitrary and capricious manner in which the Notice was issued.

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A Theory Of The REIT

Jason S. Oh (UCLA) & Andrew Verstein (UCLA; Google Scholar), A Theory of the REIT, 133 Yale L.J. 669 (2024):

Real Estate Investment Trusts (REITs) are companies that raise money from the public to invest in real estate. Despite REITs being a vast and growing part of the economy, legal scholars have paid them almost no attention. Accordingly, no one has noticed that REITs possess several unique and puzzling legal characteristics. REITs are the only American business form that are forbidden from reinvesting their profits. They are also uniquely immune to hostile takeovers. Since reinvestment and takeovers are thought to be good for investors (at least on average), REIT law would seem to be an obstacle to REIT growth. Yet, REITs have grown feverishly for decades.

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