Paul L. Caron
Dean



Thursday, November 26, 2020

Modern Call For A Renewed Commitment To Charitable Giving

Joey Bloodworth (J.D. 2020, USC), Note, Charity for All: A Modern Call for a Renewed Commitment to Charitable Giving, 93 S. Cal. L. Rev. 273 (2020):

This Note will center on the TCJA’s unpopularity, the charitable contribution deduction, and the adverse effect the TCJA is projected to have on charitable giving. It will conclude that now is an optimal time to expand the charitable contribution deduction. The expansion of the charitable contribution deduction would likely be popular for many of the same reasons that the TCJA is currently unpopular. The proposed expansion will also address some of the problems with charitable giving created or exacerbated by the TCJA. ...

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November 26, 2020 in Legal Ed News, Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Wednesday, November 25, 2020

Oei & Osofsky: The Making Of The § 199A Regulations

Shu-Yi Oei (Boston College) & Leigh Osofsky (North Carolina), Legislation and Comment: The Making of the § 199A Regulations, 69 Emory L.J. 209 (2019):

In 2017, Congress passed major tax legislation at warp speed. After enactment, it fell to the Treasury Department to write regulations clarifying and implementing the new law. To assure democratic legitimacy in making regulations, administrative law provides that an agency must issue a notice of proposed rulemaking, followed by an opportunity for the public to comment (socalled “notice and comment”). But, after the 2017 tax overhaul, many sophisticated actors did not wait until the issuance of a notice of proposed rulemaking to comment, instead going to the Treasury Department immediately with comments designed to influence the regulations.

In this Article, we examine empirically this phenomenon of post-enactment commenting by studying the making of the Internal Revenue Code Section 199A regulations—some of the most important regulations implementing the 2017 tax reform.

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November 25, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (1)

It Is Time To Eliminate The Federal Corporate Income Tax

Edward Lane (Albany) & L. Randall Wray (UMKC), Is It Time to Eliminate Federal Corporate Income Taxes?:

As the nation is experiencing the need for ever-increasing government expenditures to address COVID-19 disruptions, rebuild the nation’s infrastructure, and many other worthy causes, conventional thinking calls for restoring at least a portion corporate taxes eliminated by the 2017 Tax Cuts and Jobs Act, especially from progressive circles. In this working paper, Edward Lane and L. Randall Wray examine who really pays the corporate income tax and argue that it does not serve the purposes most people believe.

AUMKC2

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

Time For A Social Solidarity Tax?

Heinz Klug (Wisconsin), Time for a Social Solidarity Tax?:

Covid-19 is transforming the world, but we do not yet know how much. Across the globe the pandemic has exposed and exacerbated social and economic problems. From medical systems to livelihoods, Covid-19 is revealing how inequality impacts death rates, job losses, education, and housing. In many societies, including the United States, it has also exposed how these gross inequalities fall along racial and ethnic lines, with devastating impacts on marginal individuals, poor and minority communities. This article looks back at the comparative historical experience of wealth taxes and capital levies in Europe and Asia to put the present calls for wealth taxes in perspective and to suggest that a Social Solidarity Tax designed with this history as a guide may be necessary to address the coming economic catastrophe.

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

Tuesday, November 24, 2020

Faulhaber Presents Excess Returns And The Search For Substantial Activities Virtually Today At NYU

Lilian Faulhaber (Georgetown) presents Lost in Translation: Excess Returns and the Search for Substantial Activities virtually at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

Lvf6-200x300Starting in 2010, one international tax reform proposal moved from being a one-page idea in the Obama Treasury’s proposed budget to being one of the OECD’s options for CFC reform to becoming the basis for one of the major international tax reform provisions in the 2017 U.S. tax reform to being considered as part of Pillar Two of the OECD’s current digital tax project. This proposal, for a minimum tax on foreign excess returns, has changed shape with every iteration, and its proponents have justified each version of this differently and defined its various elements differently.

This Article tells the story of the many recent proposals for minimum taxes on foreign excess returns, starting with the Obama Treasury’s brief proposal and ending with the OECD’s current negotiations over digital taxation. This Article highlights the common threads that links all of these rules, and it also shows how differently the drafters of each rule have understood the purpose and design of a minimum tax on foreign excess returns.

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November 24, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Cooper: Rethinking The Estate Planning Curriculum

Jeffrey A. Cooper (Quinnipiac), Rethinking the Estate Planning Curriculum, 46 ACTEC L.J. (2020):

As a result of recent changes in Federal estate tax law, fewer and fewer clients need sophisticated estate tax planning. Many lawyers are thus spending less time acting as estate tax planners and instead deploying different skills and expertise.

In this brief article, I explore the extent to which law schools are rethinking their curricula as a result.

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November 24, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Stark: The Power Not To Tax

Kirk J. Stark (UCLA), The Power Not to Tax, 69 Am. U. L. Rev. 565 (2019):

Among the most controversial changes in federal tax policy in recent years is the new limitation on the deductibility of state and local taxes—or SALT cap. Introduced as part of the Tax Cuts and Jobs Act of 2017, the SALT cap differentially burdens residents of high-tax “blue states,” prompting some lawmakers to characterize the cap as an act of “economic civil war.” In one of the opening salvos of this “war,” a handful of blue states turned to alternative devices for raising revenue through the use of tax credits for charitable donations to state-designated funds. This strategy, modeled on long-standing “red state” tax credits used to fund private school vouchers, is rooted in the government’s “power not to tax,” understood here as the power to conditionally refrain from imposing taxes in exchange for the taxpayer making some legislatively sanctioned outlay. The introduction of the SALT cap has given new significance to this power not to tax, encouraging state and local lawmakers to devise strategies for funding public goods without utilizing formal tax mechanisms. This Article explores and evaluates the structural features of the law that account for this new state of affairs, as well as the ongoing controversy regarding how best to address the basic discontinuity in the law’s treatment of formal taxation versus conditional reductions in taxation.

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November 24, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Monday, November 23, 2020

Cauble: Presumptions of Tax Motivation

Emily Cauble (DePaul), Presumptions of Tax Motivation, 105 Iowa L. Rev. 1995 (2020):

Rebuttable presumptions are scattered throughout the Internal Revenue Code and the Treasury Regulations. In many cases, they are employed in service of determining a taxpayer’s motive or state of mind. They are not, however, always utilized when motive or state of mind must be assessed. In some contexts, courts are called upon to examine all relevant facts and circumstances in order to divine a taxpayer’s state of mind – which facts are relevant and the weight to be accorded to various facts are not specified ahead of time except to the extent set forth in judicial precedent. At the other extreme, in yet another subset of situations in which tax outcome turns on motive or state of mind, tax law provides that a given fact establishes an irrebuttable presumption of a given motive. In between the two extremes, tax law makes use of a variety of tools including rebuttable presumptions. When a rebuttable presumption is at work, the proof of a specified fact is deemed to establish the existence of a given state of mind, unless the party who is disadvantaged by that state of mind determination presents sufficient evidence to overcome it.

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November 23, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (2)

Lesson From The Tax Court: International Pilot’s Tax Home Argument Does Not Fly

Tax Court (2020)Douglas H. Cutting v. Commissioner, T.C. Memo. 2020-158 (Nov. 19, 2020) (Judge Pugh), teaches a useful lesson about that puzzling concept called “tax home” as it relates to the §911 foreign earned income exclusion.  Taxpayers can claim the §911 exclusion if their tax home is in a foreign country.  Mr. Cutting's wasn’t, even though his personal home — the place he returned to when not flying — was Thailand, where he lived with his wife and step-daughter.  A tax home, however, is not where the heart is.  Details below the fold.

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November 23, 2020 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (0)

Sunday, November 22, 2020

Penn Regulatory Review: Reforming Federal Income Tax

Penn Regulatory Review, Reforming Federal Income Tax:

Penn RegulatoryIn this week’s Saturday Seminar, scholars discuss income tax law and proposals to change an imperfect system.

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

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 paper returning to the list at #5:

  1. SSRN Logo (2018)[428 Downloads]  State Aid: The General Court Decision in Apple, by Stephen Daly (King's College London) & Ruth Mason (Virginia) (reviewed by Young Ran (Christine) Kim (Utah) here)
  2. [289 Downloads]  Federal Tax Procedure (2020 Practitioner Ed.), by John Townsend
  3. [260 Downloads]  Intangibles and the Transfer Pricing Reconstruction Rules: A Case Study of Amazon, by Antony Ting (Sydney)
  4. [187 Downloads]  An Analysis of Vice President Biden’s Economic Agenda: The Long Run Impacts of Its Regulation, Taxes, and Spending, by Timothy Fitzgerald (Texas Tech), Kevin Hassett (Hoover Institution), Cody Kallen (Wisconsin) & Casey Mulligan (Chicago)
  5. [168 Downloads]  Why Is So Much Redistribution In-Kind and Not in Cash? Evidence from a Survey Experiment, by Zachary Liscow (Yale) & Abigail Pershing (J.D. 2020, Yale)

November 22, 2020 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink | Comments (0)

Saturday, November 21, 2020

NTA 113th Annual Conference On Taxation

Highlights of the third day of the National Tax Association's virtual 113th Annual Conference on Taxation (full program here):

National Tax Association (2016)

Advances in Tax Administration
Session Chair: Elliott Ash (ETH Zurich)

Behavioral Issues in Tax Administration & Retirement Plans
Session Chair: Jason Seligman (Investment Company Institute)

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November 21, 2020 in Conferences, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Friday, November 20, 2020

Weekly SSRN Tax Article Review And Roundup: Speck Reviews Nadler's Tax-Motivated Trading And Price Efficiency

This week, Sloan Speck (Colorado) reviews a new work by Hillel Nadler (Program on International Financial Systems), The Only Sure Alpha: Tax-Motivated Trading and Price Efficiency (Aug. 12, 2020).

Speck (2017)

In The Only Sure Alpha: Tax-Motivated Trading and Price Efficiency, Hillel Nadler examines tax-motived trading in financial instruments from a novel and compelling perspective: the ways in which tax rules affect the process of price discovery in otherwise well-functioning markets. Nadler argues that tax considerations may drive “noisy trading”—trading that moves prices away from an equilibrium based on non-tax information. Although markets (eventually) should resolve these deviations of price from fundamental value, Nadler notes that the noise itself may have significant and detrimental systemic effects. Transitions to equilibrium matter, and taxation may cause distortions that leave financial markets in a constant state of low-level flux.

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November 20, 2020 in Scholarship, Sloan Speck, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Next Week's Virtual Tax Workshop

Tuesday, November 24: Lilian Faulhaber (Georgetown) will present Lost in Translation: Excess Returns and the Search for Substantial Activities virtually at NYU as part of its Tax Policy Colloquium Series. If you would like to attend, please contact Dan Shaviro.

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November 20, 2020 in Colloquia, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Satterthwaite Presents Taxing Domestic Workers Virtually Today At Florida

Emily Satterthwaite (Toronto) presents Taxing Domestic Workers: Trading a Safety Net for a Living Wage? (with Ariel Jurow Kleinman (San Diego)) virtually today at Florida as part of its Tax Colloquium Series:

Satterthwaite (2019)Paid domestic workers play a central and often intimate role in the day-to-day lives of many North Americans, including the affluent but also other groups. The livelihoods and health of, for example, the elderly, persons with serious disabilities, and women who work outside the home (and their children) may depend on the labor of one or more paid domestic workers. Yet domestic workers and their hirers tend to rely on very different workplace protections and social insurance guarantees. Our project seeks to better understand the role that tax law plays in this troubling status quo by surveying domestic workers about their tax-related experiences. The domestic sector rightly has been called “the original gig economy” because of its structural similarities with higher-technology sectors like ride-sharing. However, existing doctrinal and policy-oriented tax scholarship, including that which attends to the significant tax policy challenges presented by platform service providers and the role of contract work, has largely overlooked the domestic sector.

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November 20, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Hemel: Beyond The Marriage Tax Trilemma

Daniel Hemel (Chicago), Beyond the Marriage Tax Trilemma, 54 Wake Forest L. Rev. 661 (2019):

For decades, the well-known “marriage tax trilemma” has played a central role in discussions of the tax treatment of the family unit. The “trilemma” refers to the mathematical impossibility of constructing a tax system that imposes the same tax liability across all married couples with the same income (couples neutrality), neither encourages nor penalizes marriage (marriage neutrality), and taxes higher income individuals at higher rates (progressivity). Numerous articles have proposed responses to the trilemma that choose two of the legs over a third or that seek to split the difference among the competing neutrality norms that the trilemma casts as desirable. Most casebooks, meanwhile, use the trilemma to introduce students to the policy debate over the taxation of marriage and the household.

The overwhelming emphasis on the trilemma is surprising once one recognizes that there is in fact no trilemma at all: we need not choose among couples neutrality, marriage neutrality, and progressivity because we can have all three. The solution — which several scholars have noted, but the tax policy debate has largely ignored — lies in a flat tax rate combined with a refundable per-person tax credit (or “demogrant”), which could be constructed so as to yield a highly progressive average rate structure while maintaining couples neutrality and marriage neutrality. Whatever the merits of the flat tax plus demogrant as a policy matter, it plays a useful role as a thought experiment: If we achieved progressivity through a flat tax and a demogrant, such that we could have couples neutrality and marriage neutrality simultaneously, would we want to deviate from these neutrality norms anyway? If so — if we would want to violate the couples neutrality and marriage neutrality norms even if they were compatible with a progressive tax structure — then the trilemma is not the central challenge in the taxation of singles and couples.

This Essay examines the arguments for couples neutrality and marriage neutrality, concluding that neither norm is an appropriate objective for tax policy.

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November 20, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Thursday, November 19, 2020

Bankman Presents Why It Is So Hard To Get Easy Tax Filing Virtually Today At NYU

Joseph Bankman (Stanford) presents Mr. Smith Gets an Education: Why it is so Hard to get Easy Tax Filing virtually at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

6a00d8341c4eab53ef0240a4ec01e4200b-300wiImagine that one day, you get a note in the mail from Visa saying that starting next month, Visa will no longer be sending itemized bills (or indeed, any bills at all) to its cardholders. Instead, it will be the responsibility of every Visa cardholder to keep a record of all purchases, and refunds charged or credited to their account during the month, along with late payments and late fees, interest accruing on unpaid balances, and then tote it all up at the end of the month to figure out how much they owe Visa. If cardholders inadvertently omit some charges and pay Visa too little, you’re informed, Visa will assess interest and penalties on the underpayment.

Why on earth would Visa do such a thing?, you wonder. After all, Visa already has all that information in its computers, which can automatically calculate from that information the net amount you owe. Why should individual cardholders duplicate that effort, at considerable annoyance and expense to themselves, and with the dead certainty of errors?

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November 19, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (1)

Oei & Ring: Tax Law's Workplace Shift

Shu-Yi Oei & Diane M. Ring (Boston College), Tax Law's Workplace Shift, 100 B.U. L. Rev. 651 (2020) (reviewed by Ariel Jurow Kleiman (San Diego) here):

In December 2017, Congress passed major tax reform. The reform included an important new provision that granted independent contractors and other pass-through taxpayers—but not employees or corporations—a potential tax deduction equal to 20% of their qualified business income. Critics have argued that this new deduction (codified at 26 U.S.C. § 199A) could lead to a widespread shift toward independent contractor jobs as workers seek to reduce taxes paid. This shift could cause workers to lose important employee protections and leave them more economically vulnerable.

This Article examines whether this new tax provision will create a large-scale workplace shift and, if it does, how that shift should be normatively evaluated.

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November 19, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

NTA 113th Annual Conference On Taxation

Highlights of the first two days of the National Tax Association's virtual 113th Annual Conference on Taxation (full program here):

National Tax Association (2016)

COVID-19 and Business Tax & Credit Policies
Session Chair: Yilin Hou (Syracuse)

Electricity Sector: Policy Design and Outcomes
Session Chair: Agustin Leon-Moreta (New Mexico)

Legal Issues in International Taxation
Session Chair: Lilian Faulhaber (Georgetown)

Nonprofit Organizations
Chair: Jeremy Bearer-Friend (George Washington)

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November 19, 2020 in Conferences, Tax, Tax Conferences, Tax Scholarship | Permalink | Comments (0)

Polito: Corporate Tax Integration And TCJA

Anthony P. Polito (Suffolk), Corporate Tax Integration and TCJA: How Near the Mark?:

Congress, by the Tax Cuts and Jobs Act of 2017 (hereinafter “TCJA”), made a number of changes to the income tax rates applicable to individuals and profits of businesses conducted both in corporate and non-corporate form. Elsewhere, in an article entitled Advancing to Corporate Tax Integration: A Laissez-Faire Approach, I advanced the case for an Integrationist Norm of business income taxation. In the tax regime of the Integrationist Norm, all business profits would be subject to exactly the same tax burden as if a business were conducted directly by the individual equity holders without an intervening legal fiction of a juridical business entity.

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November 19, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Wednesday, November 18, 2020

Fox & Liscow Present The Psychology Of Taxing Capital Income Virtually Today At UC-Irvine

Edward Fox (Michigan) & Zachary Liscow (Yale) present The Psychology of Taxing Capital Income: Evidence from a Survey Experiment on the Realization Rule virtually at UC-Irvine today as part of its Tax Policy Colloquium Series hosted by Joshua Blank, Victor Fleischer, and Omri Marian:

8b851abe8a6e051adc45ff6981fbddcd1f375618The realization rule is central to income tax law, but often decreases the efficiency, equality, and simplicity of the system. Given these problems, it is surprising that we do not have a good explanation for why the rule exists for liquid assets. Scholars have long speculated about the role of the public’s views here, but little is known empirically about them. We conduct the first survey experiment to understand the psychology of taxing gains on unsold assets.

In this draft, we present the results of a pilot version of the survey. Though results are very preliminary, we have three main findings. First, respondents are far less supportive of taxing gains in unsold publicly-traded stock than sold stock, with a difference in support of 37 percentage points. This lack of support persists and seems strengthened when looking across a variety of other policy framings. Second, informing people of the arguments on “both sides” of taxing unsold stock considerably decreases support (by 19 percentage points) for taxing unsold stock.

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November 18, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Roberts Presents Whiskey, Women, And Taxes Virtually Today At Oregon

Tracey M. Roberts (Cumberland) presents Whiskey, Women, and Tax: The Unexpected and Interlocking History of the 16th, 18th, and 19th Amendments virtually at Oregon today as part of its Tax Policy Colloquium Series hosted by Roberta Mann:

Roberts (2020)Before they became the most famous pair of advocates in the U.S. women’s suffrage movement, Susan B. Anthony and Elizabeth Cady Stanton were temperance activists. Advocating for the prohibition of alcohol in a world in which women lacked both political and property rights, they sought to curb other social ills: family poverty, unemployment, domestic violence, and violent crime. Through the early 20th Century, however, the U.S. relied heavily on excise taxes, including those on liquor, to fund government operations. The passage and ratification of the 16th Amendment, authorizing a federal income tax, was needed before the 18th Amendment, prohibiting alcohol, could be passed. In turn, the 19th Amendment, granting women the right to vote, was ratified, in part, on the strength of the time-honored argument that women should not face taxation without representation. Old enemies die hard, however. The ratification of the Susan B. Anthony Amendment prohibiting discrimination on the basis of sex in access to the ballot required that suffrage activists counter the (then illegal) liquid advocacy of well-known whiskey distillers and brewers.

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November 18, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Cauble: Superficial Proxies For Simplicity In Tax Law

Emily Cauble (DePaul), Superficial Proxies for Simplicity in Tax Law, 53 U. Rich. L. Rev. 329 (2019):

Simplification of tax law is complicated. Yet, political rhetoric surrounding tax simplification often focuses on simplistic, superficial indicators of complexity in tax law such as word counts, page counts, number of regulations, and similar quantitative metrics. This preoccupation with the volume of enacted law often results in law that is more complex in a real sense. Achieving real simplification—a reduction in costs faced by taxpayers at various stages in the tax planning, tax compliance, and tax enforcement process—often requires enacting more law, not less. In addition, conceptualizing simplicity in simplistic terms can leave the public vulnerable to policies advanced under the guise of simplification that have real aims that are less innocuous. A perennial example involves lawmakers proposing a reduction in the number of tax brackets under the heading of simplifying tax law. In reality, this change does very little, if anything, to simplify law in a meaningful sense, and its truer aim is to reduce progressivity in the tax code.

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November 18, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (1)

Pandemics, Paid Sick Leaves, And Tax Institutions

Alex Zhang (J.D. 2021, Yale), Pandemics, Paid Sick Leaves, and Tax Institutions, 52 Loy. U. Chi. L.J. ___ (2021):

The COVID-19 pandemic is currently ravaging the world, and the United States has been largely unsuccessful at containing the coronavirus. One long-standing policy failure stands out as having exacerbated the pandemic in our country: the lack of a national mandate of paid sick leaves, without which workers face financial and workplace-cultural pressures to attend work while sick, thus spreading the virus to their fellow employees and the public at large.

This Article provides the blueprint for a national, subsidized mandate of paid sick leaves and two additional insights about our tax institutions as mechanisms of effectuating broader societal goals.

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November 18, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Tuesday, November 17, 2020

Bearer-Friend: Restoring Democracy Through Tax Policy

Jeremy Bearer-Friend (George Washington), Restoring Democracy Through Tax Policy:

Restoring DemocracyIn this white paper, commissioned by the Great Democracy Institute, I offer a broad menu of tax tools to help restore our democracy. By undoing current levels of inequality, our tax code can help fulfill the promise of equal political voice and equal opportunity for all. To do this, progressives must be willing to move beyond loophole closers to assert a new, affirmative vision for tax policy. This report offers such a vision — one that puts workers before holders of capital, revives the regulatory potential of tax policy, and treats taxpaying as a civic act.

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November 17, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (1)

Contemptuous Tax Reporting

Israel Klein (Ariel University), Contemptuous Tax Reporting, 2019 Wis. L. Rev. 1161 (reviewed by Mirit Eyal-Cohen (Alabama) here):

The use of self-reporting and self-assessment principles in the collection of corporate income tax means that companies are not subject to administrative tax assessment and ex-ante examination of tax positions taken, but rather to infrequent ex-post examination of tax returns submitted by their managers. Thus, while acting as the government’s agents for the purpose of assessing corporate taxes, managers can engage in contemptuous self-reporting that involves knowingly reporting tax positions that do not conform to the tax code and prevailing tax doctrines.

According to estimates provided by Congress, US companies will enjoy more than 25 billion dollars of R&D incentives in 2019 & 2020. The majority thereof will come from self-reported R&D credits claimed on companies’ tax returns. While being one of the most expensive tax expenditures claimed by corporations in the federal budget, this article argues that R&D tax incentives provide a prominent example of contemptuous tax reporting in which managers knowingly take positions that contradict prevailing tax doctrines.

This article presents a novel conceptualization of contemptuous tax reporting along with empirical findings that point to the tremendous loss of tax revenues resulting from such abusive tax behavior by S&P 500 companies.

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

Monday, November 16, 2020

Suarez Serrato Presents The Race Between Tax Enforcement And Tax Planning In Chile Virtually Today At Loyola-L.A.

Juan Carlos Suarez Serrato (Duke) presents The Race Between Tax Enforcement and Tax Planning: Evidence from a Natural Experiment in Chile (with Sebastian Bustos (Harvard), Dina Pomeranz (Zurich), Jose Vila-Belda (Fribourg), and Gabriel Zucman (UC-Berkeley)) virtually today at Loyola-L.A. as part of its Tax Policy Colloquium Series hosted by Katie Pratt and Ted Seto:

Thumb_image_9070502A large body of work highlights the key role of information reporting for tax enforcement and the development of modern tax systems. In this paper, we provide evidence that information reporting is not always sufficient to improve tax collection. Using micro-level administrative tax and custom data covering the universe of internationally active Chilean firms, we study a reform that greatly increased information reporting by multinational firms, following Chile’s accession to the OECD. We first document that multinationals conduct tax-motivated cross-border transactions: Payments to foreign subsidiaries decrease with the destination country’s tax rate, while there is no such relationship for payments to non-affiliated firms. We then use difference-in-differences regressions to estimate the impacts of the reform on taxes paid and intra-group flows of royalties, interest, goods, and services. 

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

Lesson From The Tax Court: Taxpayer Wins CDP Case But Cannot Recover Costs

Tax Court (2020)The Tax Code contains a variety of statutes designed to protect taxpayers from unreasonable and arbitrary decisions by the IRS.  I think of them as quality control measures: they require supervisory approval of certain decisions, such as the decision to impose a penalty (§6751) or the decision to open a second examination (§7605(b)).  One can also think of quality control as any procedure that allows a different decision-maker to enter the picture, not just a supervisor.  That was the lesson last week, when the Office of Chief Counsel entered the picture and fixed a problem.

But no matter what quality controls the IRS uses, or what training it gives its employees, final decisions about either the assessment or collection of taxes are sometimes simply not defensible.  Getting such decisions corrected in court costs taxpayer both time and money.  Section 7430 permits such taxpayers to recover the costs they incurred to fix an unreasonable decision.  In that sense, it is another quality control measure.

In Tung Dang and Hieu Pham Dang v. Commissioner, T.C. Memo. 2020-150 (Nov. 9, 2020) Judge Marvel teaches a lesson on the limits a taxpayer’s ability to recover costs under §7430.  There, the Office of Appeals made an indefensible decision about the collection of the Dangs’ unpaid taxes and the IRS conceded the case in Tax Court.  Nonetheless, the Dangs were not eligible to recover the costs they incurred in fixing that unreasonable CDP decision.  Details below the fold.

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November 16, 2020 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (0)

Sunday, November 15, 2020

The Top Five New Tax Papers

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

  1. SSRN Logo (2018)[403 Downloads]  State Aid: The General Court Decision in Apple, by Stephen Daly (King's College London) & Ruth Mason (Virginia) (reviewed by Young Ran (Christine) Kim (Utah) here)
  2. [278 Downloads]  The Rise of Cooperative Surplus Taxation, by Allison Christians (McGill) & Tarcisio Diniz Magalhaes (McGill)
  3. [272 Downloads]  Federal Tax Procedure (2020 Practitioner Ed.), by John Townsend
  4. [243 Downloads]  Intangibles and the Transfer Pricing Reconstruction Rules: A Case Study of Amazon, by Antony Ting (Sydney)
  5. [181 Downloads]  An Analysis of Vice President Biden’s Economic Agenda: The Long Run Impacts of Its Regulation, Taxes, and Spending, by Timothy Fitzgerald (Texas Tech), Kevin Hassett (Hoover Institution), Cody Kallen (Wisconsin) & Casey Mulligan (Chicago)

November 15, 2020 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink | Comments (0)

Saturday, November 14, 2020

Thompson: Congress And Treasury's Federal Income Tax COVID-19 Initiatives

Samuel C. Thompson, Jr. (Penn State), Congress and Treasury's Federal Income Tax COVID-19 Initiatives, 167 Tax Notes Fed. 2067 (June 22, 2020):

Tax Notes FederalIn this article, Thompson principally focuses on the business tax provisions of the CARES Act.

The article is based on a chapter in a published special supplement (titled The Deal Lawyer’s Weapons in the War on COVID- 19) to Thompson’s Mergers, Acquisitions and Tender Offers: Law and Strategies — Corporate, Securities, Taxation, Antitrust, Cross Border (updated semi-annually).

November 14, 2020 in Scholarship, Tax, Tax Analysts, Tax Scholarship | Permalink | Comments (0)

Friday, November 13, 2020

Weekly SSRN Tax Article Review And Roundup: Layser Reviews Polsky's The Impact Of The 2017 Tax Act On Personal Injury Plaintiffs

This week, Michelle Layser (Illinois) reviews Gregg D. Polsky (Georgia), The Impact of the 2017 Tax Act on Certain Personal Injury Plaintiffs, 12 Colum. J. Tax L. ___ (2021).

Layser (2018)

Between spiking COVID rates and election drama, it can be easy to forget that just a few years ago—before 2020 somehow stopped the passage of time—the country was rocked by the #MeToo movement. The 2017 movement,[1] which emboldened women across the world to use social media to signal that they had experienced sexual harassment or assault using the hashtag #MeToo, was spurred by highly public sexual-abuse allegations against film producer Harvey Weinstein.

Since everything has a tax angle, the #MeToo movement made its mark on the 2017 Tax Cuts and Jobs Act in the form of a new rule 162(q), which is informally known as the Harvey Weinstein rule. The rule disallows taxpayers’ deductions for settlement payments related to sexual harassment or sexual abuse cases when the settlement is subject to a nondisclosure agreement (NDA). Seems like a win for the movement, right? Maybe not. In a new article, Professor Gregg Polsky argues that the Harvey Weinstein rule—no matter how well intended—may actually harm sexual assault plaintiffs.

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November 13, 2020 in Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Viswanathan: The Qualified Small Business Stock Exclusion — How Startup Shareholders Get $10 Million (Or More) Tax-Free

Manoj Viswanathan (UC-Hastings), The Qualified Small Business Stock Exclusion: How Startup Shareholders Get $10 Million (Or More) Tax-Free, 120 Colum. L. Rev. F. 29 (2020):

The IPO parade of 2019 is making the early shareholders of technology startups such as Uber, Lyft, Slack, and Pinterest (among others) staggeringly wealthy. Now that these companies are publicly traded, equity owners can cash out at a huge profit. This profit would normally be taxed at long-term capital gains rates. But the qualified small business stock exclusion of Section 1202 of the Internal Revenue Code, a provision whose ostensible purpose is to promote investment in small businesses, will result in many of these millionaires paying zero federal taxes on much of this sudden wealth.

This Piece demonstrates that the loss in federal tax revenue due to Section 1202 is far greater than previously estimated, with the provision almost exclusively benefitting the wealthy.

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

Virginia Tax Review Publishes New Issue

Virginia Tax Review (2016)The Virginia Tax Review has published Vol. 39, No. 1 (Fall 2019):

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

Thursday, November 12, 2020

Leff Presents Cannabis Taxation: Theory And Practice Today At Boston University

Benjamin M. Leff (American) presents Cannabis Taxation: Theory and Practice at the Virtual Boston University Law Review Conference today on Marijuana Law 2020: Lessons from the Past, Ideas for the Future:

Leff (2020)My goal in my presentation is to make two primary points: (1) In designing a tax instrument to tax cannabis at the state level, it is misguided to get distracted by any theory of Pigouvian taxes, since the most important market substitute for legal cannabis is illegal cannabis, and so (except for some special cases) taxation of legal cannabis is not Pigouvian.  (2) In designing a tax instrument to tax cannabis at the federal level, the most important issue is the degree to which any federal tax crowds out state-level taxation, not the purported incoherence (or injustice?) of section 280E.  In fact, section 280E has some plausible benefits as compared to federal excise taxes.

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November 12, 2020 in Conferences, Scholarship, Tax, Tax Conferences, Tax Scholarship | Permalink | Comments (0)

Hemel: Indexing, Unchained

Daniel Hemel (Chicago), Indexing, Unchained, 83 Law & Contemp. Probs. 83 (2020):

Inflation indexing is an important and controversial issue in the design of tax systems and transfer programs. The choice of whether — and how — to adjust policy parameters for inflation carries significant political, distributional, and macroeconomic implications. In recent years, indexing has gained particular attention in three policy contexts: (1) whether to switch from an “unchained” to “chained” inflation index when calculating Social Security benefits; (2) whether to make a similar unchained-to-chained shift when setting federal income tax parameters such as bracket thresholds and deduction amounts; and (3) whether to index basis for inflation when calculating capital gains. Hundreds of billions of dollars ride on the resolution to these three questions.

Across all of these contexts, the debate over inflation indexing is generally framed in terms of “accuracy.” Advocates on one side argue that the use of a particular index would lead to more accurate cost-of-living adjustments or more accurate assessments of tax liability, while opponents of the change contest those claims. This Article — an invited contribution to a symposium issue on Law and Macroeconomics, based on remarks at a September 2019 conference at Georgetown University Law Center — argues that the emphasis on “accuracy” misses the mark in two respects.

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November 12, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Viswanathan: Lower-Income Tax Planning

Manoj Viswanathan (UC-Hastings), Lower-Income Tax Planning, 2020 U. Ill. L. Rev. 195:

Tax planning is generally criticized by scholars as inefficient; that is, imposing welfare-reducing costs by incentivizing transactions with few non-tax economic benefits. This Article argues that this view is unacceptably narrow and makes the original claim that tax planning by lower-income taxpayers is often welfare-enhancing and should, as a normative matter, be encouraged. As such, various parties, including the IRS, law school clinics, legal academics, and tax practitioners should actively strategize to reduce the transaction costs currently hindering lower-income tax planning. This Article then applies that mandate to a specific cohort of lower-income taxpayers—drivers working in the sharing economy—and proposes a strategy through which these taxpayers can take advantage of both existing tax laws and the § 199A qualified business income deduction of the recently enacted Tax Cuts and Jobs Act.

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November 12, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Shanske & Gamage: The Case For State Borrowing As A Response To The Pandemic

Darien Shanske (UC-Davis) & David Gamage (Indiana), The Case for State Borrowing as a Response to the Current Crises, 97 Tax Notes State 1137 (Sept. 14, 2020): 

Tax Notes StateThis essay explains how and why U.S. state governments can and should borrow funds in the absence of sufficient federal aid during the COVID-19 pandemic. ...

Introduction
The coronavirus pandemic is a national emergency that requires a national response. Asking states to absorb the budgetary losses caused by the pandemic while they are tasked with providing essential frontline services is comparable to asking states during World War II to pay for the landing in Normandy.

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November 12, 2020 in Scholarship, Tax, Tax Analysts, Tax Scholarship | Permalink | Comments (0)

Wednesday, November 11, 2020

Winchester Presents Tainted Taxes: Uncle Sam's Share Of The Spoils Of Blockbusting Virtually Today At Oregon

Richard Winchester (Seton Hall) presents Tainted Taxes: Uncle Sam's Share of the Spoils of Blockbusting virtually at Oregon today as part of its Tax Policy Colloquium Series hosted by Roberta Mann:

Richard-winchester-lg-200x200Until the late 1960s, it was the policy of the Federal Housing Administration not to subsidize or insure mortgages for homes located in areas where blacks lived, something called redlining.  As a result, banks seldom made loans to black homebuyers, creating an opportunity for real estate agents and speculators to exploit their plight through a process known as block-busting.  First, the speculators bought homes from whites at a discount after scaring them into thinking that blacks were moving into the area. Next, they resold the homes at an inflated price to black buyers through a device known as an installment sales contract.  Although such a contract permitted the buyer to pay for the home gradually over time, the buyer’s monthly payments and total cost far exceeded what they would have been under an FHA-insured mortgage.  Moreover, if the buyer missed a payment, the speculator got to keep the house and all the buyer’s prior payments.

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November 11, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Wallace: Tax Policy And Our Democracy

Clint Wallace (South Carolina), Tax Policy and Our Democracy, 118 Mich. L. Rev. 1233 (2020) (reviewing Camille Walsh (Washington), Racial Taxation: Schools, Segregation, and Taxpayer Citizenship, 1869–1973 (University of North Carolina Press 2018), and Anthony C. Infanti (Pittsburgh), Our Selfish Tax Laws: Toward Tax Reform That Mirrors Our Better Selves (MIT Press 2018)):

Racial SelfishTwo new books explore the many ways in which U.S. tax policies and tax systems have promoted social injustices and continue to do so. In Racial Taxation, Camille Walsh provides a vivid depiction of the under-scrutinized fiscal history of elementary through secondary education in the United States, from the post-Reconstruction era until San Antonio Independent School District v. Rodriguez. In Our Selfish Tax Laws, Anthony Infanti details how existing U.S. Federal tax policies manifest problematic power structures that exclude and disadvantage many if not most taxpayers. Together, these books dissect a variety of flawed tax structures and reveal that tax discrimination grounded in race, gender, heteronormativity, differences in physical ability, and, pervasively, power dynamics, are not a malignant tumor on an otherwise healthy body, but rather are a systemic, pathological affliction on the entire U.S. fiscal state. This essay reviews Walsh’s and Infanti’s work, and builds on the authors’ rich historical and analytical contributions to ask: how can tax policy be reformed so that, rather than betraying and undermining the foundations of American democracy, it works to strengthen democratic institutions and their connection with members of a democratic society?

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November 11, 2020 in Book Club, Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

SSRN Tax Professor Rankings

SSRN Logo (2018)SSRN has updated its monthly ranking of 750 American and international law school faculties and 3,000 law professors by (among other things) the number of paper downloads from the SSRN database.  Here is the new list (through November 1, 2020) of the Top 25 U.S. Tax Professors in two of the SSRN categories: all-time downloads and recent downloads (within the past 12 months):

    All-Time   Recent
1 Reuven Avi-Yonah (Michigan)  194,258 Reuven Avi-Yonah (Michigan) 7,560
2 Dan Shaviro (NYU) 121,635 D. Dharmapala (Chicago) 4,760
3 Lily Batchelder (NYU) 118,457 Ruth Mason (Virginia) 4,417
4 David Gamage (Indiana-Bloom.) 117,514 Lily Batchelder (NYU) 3,993
5 Daniel Hemel (Chicago) 117,427 David Kamin (NYU) 3,615
6 Darien Shanske (UC-Davis) 110,793 Daniel Hemel (Chicago) 3,367
7 David Kamin (NYU) 106,651 Bridget Crawford (Pace) 3,236
8 Cliff Fleming (BYU)    105,329 Diane Ring (Boston College) 3,231
9 Manoj Viswanathan (Hastings) 102,339 Shu-Yi Oei (Boston College)  3,125
10 Rebecca Kysar (Fordham) 101,244 Hugh Ault (Boston College) 2,830
11 Ari Glogower (Ohio State) 100,096 Richard Ainsworth (BU) 2,364
12 Michael Simkovic (USC) 44,842 Margaret Ryznar (Indiana-Indy)    2,225
13 D. Dharmapala (Chicago) 42,482 David Gamage (Indiana-Bloom.) 2,168
14 Paul Caron (Pepperdine) 37,528 Dan Shaviro (NYU) 2,139
15 Louis Kaplow (Harvard) 33,860 Robert Sitkoff (Harvard) 1,846
16 Richard Ainsworth (BU) 30,898 Darien Shanske (UC-Davis)  1,811
17 Ed Kleinbard (USC) 27,243 Brad Borden (Brooklyn) 1,788
18 Vic Fleischer (UC-Irvine) 26,458 Louis Kaplow (Harvard) 1,530
19 Jim Hines (Michigan) 25,373 Paul Caron (Pepperdine)   1,444
20 Brad Borden (Brooklyn) 25,296 Cliff Fleming (BYU) 1,357
21 Bridget Crawford (Pace) 25,233 Ari Glogower (Ohio State) 1,296
22 Robert Sitkoff (Harvard) 25,068 Katie Pratt (Loyola-L.A.) 1,277
23 Ted Seto (Loyola-L.A.) 24,621 Michael Simkovic (USC) 1,236
24 Gladriel Shobe (BYU) 24,234 Yariv Brauner (Florida) 1,163
25 Katie Pratt (Loyola-L.A.) 23,941 Manoj Viswanathan (Hastings) 1,144

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November 11, 2020 in Scholarship, Tax, Tax Prof Rankings, Tax Scholarship | Permalink | Comments (0)

Tuesday, November 10, 2020

Zidar Presents The Tax Elasticity Of Capital Gains And Revenue-Maximizing Rates Virtually Today At NYU

Owen Zidar (Princeton) presents The Tax Elasticity of Capital Gains and Revenue-Maximizing Rates (with Ole Agersnap (Princeton)) virtually at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

Oz-largeThis paper uses an event study approach to estimate the effect of capital gains taxation on realizations at the state level, and then develops a framework for determining revenue-maximizing rates at the federal level. We find that the elasticity of revenues with respect to the tax rate over a ten-year period is -0.5 to -0.3, indicating that capital gains tax cuts do not pay for themselves, and that a 5 percentage point rate increase would yield $18 to $30 billion in annual federal tax revenue. Our long-run estimates yield revenue-maximizing capital gains tax rates of 38 to 47 percent. 

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November 10, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Polsky: The Impact Of The 2017 Tax Act On Personal Injury Plaintiffs

Gregg D. Polsky (Georgia), The Impact of the 2017 Tax Act on Certain Personal Injury Plaintiffs, 12 Colum. J. Tax L. ___ (2021):

Columbia Journal of Tax Law Logo (2019-2)The 2017 Tax Act was the most sweeping federal tax legislation in over a generation. While many of its reforms, from dramatically lowering the corporate tax rate to altering the international tax rules, have already received significant attention, little attention has been paid to the 2017 Tax Act’s effects on personal injury plaintiffs. This Article explores these impacts.

The 2017 Tax Act added a new provision that indirectly affects plaintiffs who allege sexual harassment or abuse. The new provision disallows the defendants’ deductions in these cases if the parties enter into a nondisclosure agreement. While targeted at defendants, the provision will likely unwittingly harm plaintiffs by reducing settlement offers. The provision also suffers from a host of ambiguities that the Treasury and IRS will need to resolve.

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

Field: Allocating Tax Transition Risk

Heather M. Field (UC-Hastings), Allocating Tax Transition Risk, 73 Tax L. Rev. ___ (2020):

The enactment of sweeping tax changes in late 2017 by Republicans without any bipartisan support and the calls by Democrats to reverse those changes (and make more) when they regain political power create an unstable tax landscape that is challenging for taxpayers who are trying to make economic decisions that are affected by tax law. One strategy for grappling with this instability and uncertainty is for taxpayers to use contracts to allocate the economic benefits and burdens of a possible future tax law change among themselves. The literature says almost nothing about this contract-based strategy for managing tax transition risk. This gap is surprising because (a) the leading view on tax transition policy argues that taxpayers should account for the risk of tax law changes the same way they take other market risks into account when making decisions, and (b) private contracting is a well-accepted method for addressing market risks. To fill this gap, this Article uses four case studies—involving derivatives, credit agreements, municipal bonds, and merger agreements—to demonstrate that taxpayers are using tax transition risk-shifting contracts and to illustrate how this risk-management strategy varies.

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

Monday, November 9, 2020

Osofsky Presents The Surprising Significance Of De Minimis Tax Rules Virtually Today In California

Leigh Osofsky (North Carolina) presents The Surprising Significance of De Minimis Tax Rules, 78 Wash. & Lee L. Rev. ___ (2021) (with Kathleen DeLaney Thomas (North Carolina)), virtually today as part of the San Diego-Davis-Hastings Tax Law Speaker Series:

OsofskyDe minimis tax rules—rules that eliminate tax burdens for low-income taxpayers or low-dollar transactions—abound in the tax law. Despite the prevalence of such rules, legal scholarship has treated them as—well—de minimis, or as mere rounding errors that do not merit sustained attention. This perspective is understandable. If de minimis rules address insignificant taxpayers or tax liabilities, aren’t the rules themselves likely to be insignificant?

Recent tax law developments have revealed that this conception of de minimis tax rules is deeply misguided. Major allocations of tax law liability, as well as accompanying questions about the fairness, efficiency, and administrability of the tax system, turn on the existence and design of de minimis tax rules. In the wake of the recent Tax Cuts and Jobs Act, for example, astute industry players successfully lobbied the Treasury Department to create de minimis tax rules, thereby scoring significant monetary victories. De minimis tax rules like these not only serve as low-salience giveaways, but are also poorly designed in a way that undermines the integrity of the tax system.

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

Galle Presents How To Save Unemployment Insurance Virtually Today At Loyola-L.A.

Brian Galle (Georgetown) presents How to Save Unemployment Insurance, 50 Ariz. St. L.J. 1009 (2019), virtually today at Loyola-L.A. as part of its Tax Policy Colloquium Series hosted by Katie Pratt and Ted Seto:

Galle (2020)Unemployment insurance is almost universally recognized as one of a government’s best tools for fighting recessions, as well as an important source of relief for working-class families suffering temporary hardship. Unfortunately, as commentators and Congress have recognized, the U.S. system of financing its unemployment insurance program is seriously dysfunctional. Reform proposals, however, do not fully diagnose the causes of current failures. In particular, other commentators neglect the role of fiscal myopia in state officials’ failures to save for future UI needs. For instance, reformers mostly propose offering rewards or penalties that will take effect far in the future. These incentives have only small effects on myopic officials. 

Building on work in behavioral economics by myself and others, I propose a set of new reforms that address the roles that both myopia and federalism have played in crippling the UI regime. For example, I suggest that state governments can be induced to “Save More Tomorrow,” and that states should be obliged to opt out of federal default rules for when workers will be eligible for benefits.

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

Lesson From The Tax Court: How To Beat The Bureaucracy

Tax Court (2020)My friends joke that my time as an attorney in the IRS Office of Chief Counsel was spent in the belly of the Beast.  I’m not a fan of that analogy because it implies the IRS is a single entity.  As regular readers of this blog (if any exist) know, I regularly argue against that view.  The best way to think of the IRS---both in theory and practice---is that it is a collection of different offices (or functions) each of which has certain defined authorities.  Folks, it’s a bureaucracy, not a beast.

Today’s case, Colleen Michelle Leith, Petitioner, and Oraine J. Leith, Intervenor v. Commissioner, T.C. Memo. 2020-149 (Nov. 4, 2020) (Judge Vasquez), teaches a great lesson on how getting to a different bureaucratic decision-maker can turn defeat into victory.  There, the taxpayer sought spousal relief and lost in the IRS.  Although the Tax Court decision is in her favor, she really won the case in the Office of Chief Counsel.  Details below the fold. 

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November 9, 2020 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (0)

Sunday, November 8, 2020

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. SSRN Logo (2018)[362 Downloads]  State Aid: The General Court Decision in Apple, by Stephen Daly (King's College London) & Ruth Mason (Virginia) (reviewed by Young Ran (Christine) Kim (Utah) here)
  2. [312 Downloads]  Good Tax Governance: International Corporate Tax Planning and Corporate Social Responsibility – Does One Exclude the Other?, by Ave-Geidi Jallai (Tilburg)
  3. [259 Downloads]  The Rise of Cooperative Surplus Taxation, by Allison Christians (McGill) & Tarcisio Diniz Magalhaes (McGill)
  4. [253 Downloads]  Federal Tax Procedure (2020 Practitioner Ed.), by John Townsend
  5. [220 Downloads]  Intangibles and the Transfer Pricing Reconstruction Rules: A Case Study of Amazon, by Antony Ting (Sydney)

November 8, 2020 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink | Comments (0)

Saturday, November 7, 2020

Cohen & Viswanathan: Corporate Behavior And The Tax Cuts And Jobs Act

Nicholas H. Cohen (LobbySeven, Brooklyn) & Manoj Viswanathan (UC-Hastings), Corporate Behavior and the Tax Cuts and Jobs Act, 87 U. Chi. L. Rev. Online (2020):

The Tax Cuts and Jobs Act of 2017 (the “TCJA”) fundamentally altered United States tax law. Among other things, it broadly decreased income tax rates paid by individuals and corporations, eliminated miscellaneous itemized deductions, limited the state and local tax deduction, increased the standard deduction, reduced the alternative minimum tax for individuals and eliminated it entirely for corporations, and allowed a deduction for certain pass-through business income.

TCJA proponents, generally Republicans, claimed that its $1.5 trillion of tax cuts would result in significant economic benefits. In particular, TCJA supporters believed that the tax benefits afforded U.S. corporations, most notably the reduction in rate from 35 percent to 21 percent, would incentivize corporations to use their additional after-tax cash in ways generally beneficial to the U.S. economy. Predicted indicia of these salutary effects included increases in the rate growth of gross domestic product, increased national capital stock, and significant increases to workers’ wages. TCJA opponents instead expected its benefits to inure almost entirely to a small group of investors and corporate managers. Many critics (generally Democrats and deficit hawks) considered the TCJA a distributionally unsound way to allocate such a significant tax cut.

Corporations have operated for nearly two years under this new corporate tax regime. Their most recent annual corporate filings provide information from the first full calendar year in which the TCJA’s provisions are in full effect. These reports contain information on effective tax rate, capital expendituresCEO compensation, and other important metrics of corporate activity and productivity. From this data we can analyze the preliminary effects the TCJA has had on these corporations and assess the extent to which claims made by the TCJA’s proponents on corporate behavior have been borne out. While other studies have considered the TCJA’s effect on specific corporate attributes, this Essay is the first to assess the TCJA’s effect on a range of corporate behaviors by using recently filed, publicly available data on a granular, corporation-by-corporation basis.

Specifically, our study assesses the extent to which changes in effective tax rates for the top cohort of companies in the Standard & Poor’s 500 index (S&P 500) relate to a variety of corporate behaviors purportedly affected by the TCJA.

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November 7, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Friday, November 6, 2020

Weekly SSRN Tax Article Review And Roundup: Holderness Reviews Choi's How Does Chevron Shape Agency Rulemaking?

This week, Hayes Holderness (Richmond) reviews Jonathan H. Choi (Minnesota), How Does Chevron Shape Agency Rulemaking? An Empirical Study, 38 Yale J. Reg. ___ (2021):

Holderness (2017)One would be hard-pressed to find a tax lawyer without knowledge of 1984’s Chevron case, which established a deferential standard for judicial review of agency rulemaking—as long as the rule is a reasonable interpretation of an ambiguous statute, courts should defer to the judgment of the agency. Most tax lawyers presumably also are familiar with 2011’s Mayo decision, which affirmed that tax regulations were subject to the same Chevron standard as regulations in other areas of law. Until Mayo, tax was assumed to be exceptional in this realm, with certain regulations entitled to less deference than Chevron would have provided.

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November 6, 2020 in Hayes Holderness, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Fleischer Presents Death And Taxes: A Libertarian Reappraisal Virtually Today At Boston College

Miranda Perry Fleischer (San Diego) presents Death and Taxes: A Libertarian Reappraisal virtually at Boston College today as part of its Tax Policy Workshop Series hosted by Shu-Yi Oei, Jim Repetti, and Diane Ring:

3333Libertarian opposition to “death taxes” is a polestar in discussions of justice and taxation. Theorists ranging from Milton Friedman to Richard Epstein to Loren Lomasky have vociferously rejected such taxes, arguing that inheritance taxes “run[] roughshod over the deceased’s interest,” are “an especially cruel injury,” and should be considered an “expropriation” instead of a tax. This Article challenges these conclusions, arguing that libertarians overstate the case against taxing gifts and bequests. At minimum, even minimal state libertarianism mandates that the income tax should treat gifts and bequests like any other property right or item of income.

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