Netanya Hosts 9th International Roundtable On Taxation And Tax Policy

Netanya hosts the 9th International Roundtable on Taxation and Tax Policy (program) today:

Session I: International Taxation I: Pillar Two
Chair: Yoram Margalioth (Tel Aviv University)

Sagit Leviner (Ono Academic College; Google Scholar), The Two Pillar Reform in International Taxation of Multinational Corporations: Challenges and Policy Recommendations:

The current international tax system, designed over a century ago, struggles to address the challenges of the modern economy. While in the past it was relatively easy to define where income was generated and where business activity took place, today's digital and global economy presents new challenges arising from the fact that business activity occurs largely in the virtual space, without the need for physical presence, fundamentally different from the world for which the international tax rules were originally designed. This paper aims to contribute to the understanding of current trends in international taxation and their impact on Israel, by outlining key issues in the design of the contemporary international tax system and its trajectory. In particular, the paper presents and analyzes the emerging reform in international taxation led by the Organization for Economic Cooperation and Development (OECD), known as the "Two-Pillar Reform," assuming it progresses based on its current status. This is against the backdrop of the critical intersection between the Two-Pillar Reform and Israel's system of tax incentives and investment policy.

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Narotzki: When Debt Gets A Makeover, Taxes Follow

Doron Narotzki (Akron; Google Scholar), When Debt Gets a Makeover, Taxes Follow, 21 U.C. L. Bus. J. 85 (2024):

The taxation of debt modifications is a complex and crucial area of tax law, significantly impacting both corporate finance and the broader economy. This article explores the complex legal and economic implications of modifying debt instruments, focusing on the key provisions of the Internal Revenue Code (IRC) and covers the foundational principle of “realization,” which governs the recognition of income, gain, or loss when a debt modification is deemed significant under Treasury Regulation § 1.1001-3. The article delves into the tax consequences for both debtors and creditors, highlighting the potential for Cancellation of Debt Income and the challenges of managing gain or loss recognition. The discussion further examines the interplay between debt modifications and other IRC provisions, including the limitations imposed by IRC Section 163(j) on interest deductions and the restrictions under IRC Section 382 following ownership changes. 

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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 #5. The #1 paper is #464 among 12,129 tax papers in all-time downloads.

1. [953 Downloads]  Policies to Reduce Federal Budget Deficits by Increasing Economic Growth, by Douglas Elmendorf (Harvard), Glenn Hubbard (Columbia) & Zachary Liscow (Yale)
2. [317 Downloads]  The Global Minimum Tax and Intra Western Tax Competition, by Rifat Azam (Radzyner; Google Scholar)
3. [294 Downloads]  What Went Wrong In The Apple State Aid Case: Part 1 - The Case, by Ruth Mason (Virginia; Google Scholar) & Stephen Daly (King's College London; Google Scholar)
4. [245 Downloads]  The Forgotten Attribution Power, by Alex Zhang (Emory; Google Scholar) (reviewed by Blaine Saito (Ohio State; Google Scholar) here) 
5. [149 Downloads]  ERISA and the Failure of Employers to Perform their Fiduciary Duties: Evidence from a Survey of Health Plan Administrators, by Amy Monahan (Minnesota; Google Scholar), Jeffrey Pfeffer (Stanford; Google Scholar), Barak Richman (George Washington; Google Scholar) & Sara Singer (Stanford; Google Scholar)

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Weekly SSRN Tax Article Review And Roundup: Eyal Reviews Guttentag's The New Law And Inequality Scholarship

This week, Mirit Eyal (Alabama; Google Scholar) reviews a new work by Michael D. Guttentag (Loyola-L.A), The New Law and Inequality Scholarship, 105 B. U. L. Rev. 897 (2025).

In recent decades, both legal and economic scholarship have largely converged on the view that redistribution can be pursued through the tax system rather than through substantive legal rules. Yet, against the backdrop of persistent and, in many jurisdictions, worsening inequality, we have witnessed a growing body of scholarship is beginning to revisit this orthodoxy. Guttentag’s article joins this conversation and offers a compelling case for reexamining the role of law—tax law included—in addressing distributive concerns.

At the heart of Guttentag’s analysis is a sustained critique of the “double distortion” framework developed by Kaplow and Shavell in the 1990s (see, e.g., here. That framework holds that legal rules aimed at redistribution are inefficient because they distort both behavior and market functioning. 

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Narotzki & Shanan: We The People ... Deserve Fair Taxes

Doron Narotzki (Akron; Google Scholar) & Tamir Shanan (College of Management; Google Scholar), We the People... Deserve Fair Taxes, 31 Cardozo J. Equal Rts. & Soc. Just. 573 (2025):

In a world where economic inequality is deepening, tax law has emerged as one of the most powerful tools for shaping social justice. This article explores how progressive taxation serves not only as a fiscal mechanism but as a reflection of societal values and the moral obligations of wealth. With legal methodologies such as Purposivism, Originalism, and Living Constitutionalism providing different interpretative lenses, this article delves into the crucial discourse surrounding income, tax avoidance, deductions, and wealth taxation.

Through an analysis of real-world tax policies and legal precedents, the article examines how these methodologies either perpetuate or challenge the current tax system’s role in addressing inequality. Are the constitutional frameworks built by the framers flexible enough to confront today’s economic disparities, or are they bound by the past? How can courts and legislators reconcile and justify protecting individual liberty with the pressing need for redistribution?

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Johnson: Cut $1 Trillion Of Governmental Fat Out Of Tax Expenditures

Calvin H. Johnson (Texas), Cut $1 Trillion of Governmental Fat Out of Tax Expenditures, 187 Tax Notes Fed. 2247 (June 23, 2025):

In this report, Johnson argues that tax expenditures are always wasteful because only a fraction of their cost is passed on to the purported beneficiaries and that direct government dollars could accomplish the same good at a fraction of the cost. He examines tax breaks for municipal bonds, the research tax credit, qualified pension plans, mortgage interest deductions, Opportunity Zones, and conservation easements, finding that they are largely unjustified and need tighter focus and reduced cost.

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Tax Law Scholarship: Introspection And Typology

Alice Pirlot (Catholic University of Louvain; Google Scholar), Tax Law Scholarship: Introspection and Typology, 8 British Tax Rev. 277 (2025):

This article asks seemingly simple questions about tax law scholarship: What is it? To what extent does it differ from legal scholarship in other fields? Who is targeted by it? What are the main objectives that guide the research agenda of tax law scholars? These are not the typical questions that tax law scholars write about but, as this article tries to demonstrate, answering them can shed light on some of the strengths, pitfalls and trends that characterise tax law scholarship today. This article has two parts. 

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Tax Prof Panel On The International Tax Revolution

Society for the Advancement of Socio-Economics (SASE) hosts an annual conference today with a panel book salon on The International Tax Revolution:

The past decade has witnessed the creation of a new International Tax Regime (ITR). The original ITR was created a century ago by the League of Nations based on a compromise reached in 1923. Until the 1980s, it functioned well by preventing most instances of double taxation and double non-taxation by allocating cross-border income between home and host jurisdictions.

However, since the advent of globalization in the 1980s and digitalization in the 1990s, the original ITR has ceased to function as intended. The main problem is the increased mobility of capital related to increased intangibility and digitalization, in conjunction with a relaxation of capital controls and increased tax competition.

These developments posed a problem for countries that wished to leave their financial borders open to reap the benefits of globalization. 

Countries were faced with a difficult choice if they wished to continue to participate in an open, globalized financial economy.

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Winning By Losing: The Strategy Of Adverse Private Letter Rulings

Noah Hertz Marks (North Carolina), Winning by Losing: The Strategy of Adverse Private Letter Rulings, 66 B.C. L. Rev. 659 (2025) (reviewed here by Blaine Saito (Ohio State; Google Scholar)):

Every year, the Internal Revenue Service (IRS) issues hundreds of Private Letter Rulings (PLRs) responding to formal taxpayer inquiries about how tax law will apply to their proposed situations and transactions(which functionally bind the IRS with respect to the taxpayer). Although the Internal Revenue Code formally forbids relying on PLRs as precedent, taxpayers and practitioners closely monitor and structure their operations and advice around PLRs.

Taxpayers can withdraw a PLR request at any time for any (or no) reason. Furthermore, requesting taxpayers know far in advance whether the PLR will be favorable or adverse.

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Soled & Todd: Hiring Biases Fostered Under The Code

Jay A. Soled (Rutgers; Google Scholar) & Timothy M. Todd (Liberty; Google Scholar), Hiring Biases Fostered Under the Code, 187 Tax Notes Fed. 2273 (June 23, 2025):

In this article, Soled and Todd argue that current tax law gives U.S. employers a financial incentive to hire job applicants who have secured certain foreign visa statuses, and they propose three reform options to address the resulting problems.

Conclusion
The vitality of the U.S. economy has traditionally rested on the strength and indefatigable spirit of its workers. Historically, Congress has instituted policies that promote this ethos, enabling the country to prosper. And perhaps even more importantly, the United States has made a collective promise to its workers as they plan their retirements. Yet, for a variety of reasons, the solvency of that promise is at substantial risk.

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Private Equity's Byzantine Tax Stand: An Untold And New Story Of Carried Interest

Domenico Imparato (University of Hamburg, UC-Berkeley), Private Equity's Byzantine Tax Stand: An Untold and New Story of Carried Interest, 7 Brit. Tax Rev. __ (2024):

With the expansion of private equity’s footprint in the global economy has come scrutiny of its unique profit-sharing system, known as “carried interest”, which is perceived to enjoy favourable tax treatment.

The debate over whether to tax carried interest as a capital gain or as ordinary income reflects the tax industry’s complex interplay between finance, leverage, capital distribution, corporate structures and tax strategies. This article contributes to the ongoing discussion by proposing an empirical risk-based approach (ERB Approach) for the optimal taxation of carried interest. 

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Avi-Yonah: Should Harvard And Other Large Nonprofits Be Taxed?

Reuven S. Avi-Yonah (Michigan; Google Scholar), Should Harvard and Other Large Nonprofits Be Taxed?, 187 Tax Notes Fed. 2299 (June 23, 2025):

In this installment of Reflections With Reuven Avi-Yonah, Avi-Yonah examines justifications for exempting Harvard University and other large nonprofits from tax and argues that treating those organizations like large C corporations would not be such a bad thing. ...

Subjecting large tax-exempt organizations to tax is justified even if they have no taxable income for the reasons identified by Dale, Hemel, and Manny [What Are The Real Tax Risks For Harvard?, 187 Tax Notes Fed. 1447 (May 26, 2025) (reviewed here by David Elkins (Netanya; Google Scholar))].

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Wallace Reviews Taxation, Citizenship And Democracy In The 21st Century

Clint Wallace (South Carolina; Google Scholar), Book Review, 8 British Tax Rev. 296 (2025) (reviewing Taxation, Citizenship and Democracy in the 21st Century (Yvette Lind (BI Norwegian Business School; Google Scholar) & Reuven S. Avi-Yonah (Michigan; Google Scholar) eds. 2024)):

The editors of this volume diplomatically challenge the “conservative amount of communication” between scholars focusing on taxation, citizenship and democracy. In this helpful compendium of research, they seek to bring some coherence to these notably disparate fields. The need for this effort is, frankly, acute. Tax regimes in democracies around the world are regularly described as unfair, inefficient and in-administrable. Taxpayers have, in just the last decade, repeatedly led angry demonstrations against the existing and proposed tax laws. Similar complaints have echoed across modern and pre-modern times, sometimes escalating into protests and uprisings. Yvette Lind starts the book with a reference to the democratic innovation in Magna Carta, which limited the sovereign’s authority to impose taxes unilaterally, noting that it was echoed in the Boston Tea Party half a millennium later in calls for “no taxation without representation”. As she observes, we do, indeed, “find this battle cry throughout history”: again and again, tax has motivated uprisings to reset policy or even overthrow governments, from France’s uprising against les fermiers generaux three centuries ago, to the Zulu rebellion in South Africa in the early 1900s, property tax revolts in the US in late 1970s, to the poll tax revolt in England, and many times and places in between and since. 

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Lesson From The Tax Court: The New Regulation On Supervisory Approval Of Penalties

Section 6751(b) requires supervisory approval before the IRS can assess certain penalties.  The statute is untouched by the recently enacted BBBA.  In late December Treasury published these final rules on how the IRS must comply with the statute.  Professor Caleb Smith shared some good thoughts on them on this Procedurally Taxing post.  This Lesson is an opportunity to see how they will work.

In one sense it is too early for the Tax Court to teach us a lesson on the new regulations because the regulations only apply to penalties assessed on or after December 23, 2024.  Treas. Reg. 301.6751(b)-1(f).

But in Ivey Branch Holdings LLC v. Commissioner, T.C. Memo. 2025-63 (June 9, 2025), Judge Lauber gives us an opportunity to see how the new regulations will work in Tax Court, both as to issues about the timing of supervisory approval, and as to how the approval process works when the taxpayer is examined by a team of IRS employees and not just a single IRS employee.

The timing lesson is useful because the regulations adopt what I call the horse-and-barn rule and reject what I call the Tax Court’s consequential moment rule.  Four Circuit Courts of Appeals have also adopted the horse-and-barn rule including the Circuit to which this taxpayer would take an appeal.  So Judge Lauber evaluates the IRS compliance with §6751(b) under what will become the governing rule per the regulations.

The teams lesson is also useful to learn because the stereotype of a single gimlet-eyed auditor acting alone is a myth.  The reality is that IRS employees will often seek advice and support from other employees on matters, especially now, as the IRS copes with incessant budget cuts by pooling resources.  For example, an RA may seek support from other IRS employees who are designated to provide subject matter support on a particular issue...such as penalty application!  Or the RA may seek support and direction from supervisors  Or different RA’s may be assigned to work different issues on the same examination.  The various back-and-forth communications between all these employees can sometimes make it difficult to see which “individual” IRS employee makes the “initial determination” that must then be approved.  The new regulations deal with that problem and so does Judge Lauber in today’s case, giving us a lesson on how both the Tax Court and the regulations evaluate compliance with 6751(b) when the examination is conducted by a team.

Details below the fold.

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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. The #1 paper is #476 among 12,124 tax papers in all-time downloads.

1. [936 Downloads]  Policies to Reduce Federal Budget Deficits by Increasing Economic Growth, by Douglas Elmendorf (Harvard), Glenn Hubbard (Columbia) & Zachary Liscow (Yale)
2. [662 Downloads]  IRS Officials' Stock Holdings and Corporate Tax Outcomes, by Michael Mayberry (Florida; Google Scholar), Eashwar Nagaraj (Florida) & Scott Rane (Florida; Google Scholar)
3. [310 Downloads]  The Global Minimum Tax and Intra Western Tax Competition, by Rifat Azam (Radzyner; Google Scholar)
4. [283 Downloads]  What Went Wrong In The Apple State Aid Case: Part 1 - The Case, by Ruth Mason (Virginia; Google Scholar) & Stephen Daly (King's College London; Google Scholar)
5. [233 Downloads]  The Forgotten Attribution Power, by Alex Zhang (Emory; Google Scholar) (reviewed by Blaine Saito (Ohio State; Google Scholar) here) 

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

The Case For Fixing The Unprincipled Residence Tax Exemption

Samuel Singer (University of Ottawa) & Allison Christians (McGill; Google Scholar), The Case for Fixing the Unprincipled Residence Tax Exemption, 63 Osgoode Hall L.J. __ (2026):

When Canada overhauled its income tax to include capital gains in 1972, lawmakers suddenly had to decide how to deal with personal home sales. After heated debate, they opted to exclude the gains on an individual's principal residence on the grounds that the core purpose of a home is to provide "basic shelter" for its owneroccupants. This tax exemption has since become one of Canada's most significant tax shelters, and now amounts to one of Canada's largest tax subsidies to individuals. Along the way, it has created economic distortions, administrative challenges, and inequitable distributive outcomes. 

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Guttentag: The New Law And Inequality Scholarship

Michael D. Guttentag (Loyola-L.A.), The New Law and Inequality Scholarship, 105 B.U. L. Rev. 897 (2025):

An emerging body of scholarship is challenging the orthodoxy that the tax system rather than the legal system should be used to address inequality. This "New Law and Inequality Scholarship" argues for using law to address inequality for both practical and theoretical reasons and, notably, is grounded in the same kind of rigorous and evidence-based analysis relied on by an earlier generation of law and economics scholars to argue against using legal rules to address inequality. Two of the most exciting thinkers in this new area of research are Ofer Eldar and Rory Van Loo. 

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Avi-Yonah: OBBBA And The Next Tax Reform

Reuven S. Avi-Yonah (Michigan; Google Scholar), OBBBA and The Next Tax Reform:

This paper compares OBBBA to the 1986 tax reform and suggests what a future US tax reform building on OBBBA might look like.

The One Big Beautiful Bill Act (OBBBA) as passed by the Senate is far from an ideal tax reform. If the ideal is the 1986 tax reform, then a tax reform should be revenue and distributionally neutral, broaden the base, and cut the rates. OBBBA falls short because it (a) is not revenue neutral, (b) is not distributionally neutral, and (c) narrows the tax base (e.g., by maintaining and expanding section 199A) while not reducing tax rates (since both the individual and corporate tax rates stay the same, and the FDII and GILTI rate are raised).

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Institute For Austrian And International Tax Law Conference On The Impact Of Artificial Intelligence On Tax Law Kicks Off Today

The Institute For Austrian And International Tax Law hosts a conference on The Impact of Artificial Intelligence on Tax Law July 3-5 (program): 

This conference will compare different approaches to the governance and use of AI for tax purposes from the point of view of various stakeholders analyzing the unprecedented opportunities and risks inherent in the use of AI tools in tax administration, enforcement and compliance. It aims at examining the legislative framework governing AI, the role of taxes incentivizing or disincentivizing investments in AI, substantive and procedural issues surrounding the use of AI in various fields of taxation and the main trends, uses and challenges of deployment of AI by tax administrations. A major topic that the conference will explore is the limits to the use of AI by tax administrations, in particular, the fundamental rights of taxpayers and data protection rules that are in place in national, international and supranational laws, or should be put in place, to protect taxpayers from the excesses of public authorities when using this potent technology. Finally, it will be discussed how taxpayers may benefit from the use of AI by tax administrations through enhanced taxpayers’ services and compliance assistance as well as the potential future uses of AI for taxation purposes.

Thursday, July 3 

3:30 - 6:00 PM: Doctorate Workshop

Friday, July 4

9:00 - 10:30 AM: Definition and Legislative Framework Governing AI

11:00 - 12:30 PM: Tax Rules and Policies Incentivizing and Disincentivizing the Investment in AI 

2:00 - 3:30 PM: Other Substantive and Procedural Issues Concerning AI and Taxation 

4:00 - 5:30 PM: The Use of AI by Tax Administrations

Saturday, July 5

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The Tax Lawyer Publishes New Issue

The Tax Lawyer has published Vol. 78, No. 2 (Winter 2025): 

• Susannah Camic Tahk (Wisconsin; Google Scholar), The Tax Separation of Powers, 78 Tax Law. 167 (2025) 
• Bret Wells (Houston; Google Scholar), Ruminations on Negative Basis, Rev. Rul. 68-55, and Bigfoot Fallacies, 78 Tax Law. 225 (2025) 

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Ajay Mehrotra Receives Prestigious Research Honors To Support His Latest Tax Book Project

Northwestern Law News, Professor Ajay Mehrotra Receives Prestigious Research Honors to Advance New Book Project: 

Ajay K. Mehrotra, the Stanford Clinton Sr. and Zylpha Kilbride Clinton Research Professor of Law at Northwestern Pritzker School of Law, and Affiliated Professor of History also at Northwestern University, has been selected as a Visiting Scholar at the Russell Sage Foundation. He also received a Franklin Research Grant from the American Philosophical Society, which will enable him to travel to archives for research purposes. These distinguished honors will significantly support work on his current book project, currently titled “American Outlier: Economic Inequality and the U.S. Historical Resistance to National Consumption Taxes.” ...

“I am deeply honored to receive these awards, which will enhance my research and allow me to explore the complexities of economic inequality within the historical development of American tax law and fiscal policy,” Mehrotra says. “I look forward to delving into these topics more deeply both individually through the American Philosophical Society’s travel-to-archives grant, and collectively via the Russell Sage Visiting Scholars program.”

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Pittsburgh Tax Review Publishes New Issue

The Pittsburgh Tax Review has published Vol. 22, No. 2 (2025):

• Darien Shanske (UC-Davis; Google Scholar), Progressive State Tax Policy is Possible and Imperative, 22 Pitt. Tax Rev. 167 (2025)
• Adam B. Thimmesch (Nebraska; Google Scholar), The Dimensions of State Antipoverty Tax, 22 Pitt. Tax Rev. 179 (2025)
• Susannah Camic Tahk (Wisconsin; Google Scholar), A Tale of Two Credits, 22 Pitt. Tax Rev. 199 (2025)
• Jennifer Bird-Pollan (Wayne State; Google Scholar), Cash Transfers: What Pandemic Era School Lunch Programs Can Teach Us About Tax, 22 Pitt. Tax Rev. 239 (2025)

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Conjuring Markets: Valuation In Comparative International Economic Law

Toni Marzal (University of Glasgow), Conjuring Markets: Valuation in Comparative International Economic Law, 27 J. Int'l Econ. L. 353 (2024):

This article focuses on the neglected relationship between market valuation and international economic law by comparing valuation practices in four subfields: international investment law, the law of the European Convention of Human Rights, international tax law, and World Trade Organization law. The operation of each of these hinges, in some crucial respect, on how the worth of a certain thing is determined by the market (calculating damages awarded to investors, identifying a breach of the right to property due to insufficient compensation, allocating taxable income among sovereigns under transfer pricing rules, and identifying the existence and extent of an actionable subsidy). 

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Zelinsky: Private Foundations, DAFs, And The One Big Beautiful Bill Act

Edward A. Zelinsky (Cardozo), Private Foundations, DAFs, and the One Big Beautiful Bill Act, 187 Tax Notes Fed. 2135 (June 16, 2025):

In this article, Zelinsky examines the One Big Beautiful Bill Act’s proposed progressive tax rate structure for large private foundations’ net investment income, pointing out that the bill doesn’t apply the same structure to donor-advised funds.

Conclusions
OBBBA section 112022 would replace section 4940’s 1.39 percent flat rate tax on private foundations’ investment incomes with a progressive structure. Under amended section 4940, NII tax rates would increase in three steps for larger private foundations.

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Avi-Yonah: Is Section 899 A Valid Treaty Override?

Reuven S. Avi-Yonah (Michigan; Google Scholar), Is Section 899 A Valid Treaty Override?:

[P][P]roposed section 899 clearly violates the non-discrimination provision of US tax treaties by subjecting a US branch of a foreign corporation to a higher tax rate than a domestic corporation. In addition, Section 899 amplifies the BEAT, which itself violates the non-discrimination provision, and raises withholding tax rates above the treaty rates, which is not an increase protected by the Saving Clause (Article 1(4)) since it applies directly to the foreign corporation or individual.

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The Excise Tax On ‘Excessive’ Charity Compensation

Elaine Wilson (West Virginia; Google Scholar), The Fallacies Behind The Excise Tax On "Excessive" Charity Compensation, 56 Loy. U. Chi. L.J. 17 (2024):

This Article examines the fundamental flaws in Section 4960 of the Internal Revenue Code, which imposes an excise tax on nonprofit executive compensation exceeding $1 million. The provision, enacted as part of the 2017 Tax Cuts and Jobs Act, rests on three problematic fallacies. First, Congress incorrectly assumed that an excise tax on nonprofits would function equivalently to the elimination of a tax deduction for excessive compensation in the for-profit sector under Section 162(m). Second, lawmakers failed to recognize that nonprofits respond differently to tax incentives than for-profit entities due to their distinct governance structures and sensitivity to public opinion about overhead costs. Third, and most significantly, Section 4960 was never truly intended to regulate excessive compensation, but rather serves to reinforce harmful narratives about nonprofit wages while raising revenue from an already disfavored sector. The Article argues that Section 4960's mechanical approach ignores the complex realities of nonprofit compensation and governance while potentially damaging organizational capacity. 

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The Impact Of Legacy And Donor Admissions On A University's Tax-Exempt Status

John R. Dorocak (Cal State-San Bernardino; Google Scholar), How Might a University's Tax-Exempt Status Not Be Revoked by the IRS for Legacy and Donor Admissions, Particularly after Students for Fair Admissions v. President & Fellows of Harvard College, and after Loper Bright Enterprises v. Raimondo?, 56 U. Tol. L. Rev. 1 (2024):

Particularly after the Supreme Court decision in Students for Fair Admissions, Inc. v. President & Fellows of Harvard University (“SFA”), holding admissions programs failed strict scrutiny by using race as a stereotype or negative, a number of law review articles have attempted to utilize the reasoning of the majority opinion particularly in a variety of settings.

Some have even attempted to use SFA in the area of taxation. One area in which SFA might be utilized is to attempt to revoke the tax-exempt status of universities for discrimination in admissions, particularly in granting legacy (close relatives of alumni) and donor (financial contributor) admissions.

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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 #4 and #5. The #1 paper is #484 among 12,118 tax papers in all-time downloads.

1. [929 Downloads]  Policies to Reduce Federal Budget Deficits by Increasing Economic Growth, by Douglas Elmendorf (Harvard), Glenn Hubbard (Columbia) & Zachary Liscow (Yale)
2. [659 Downloads]  IRS Officials' Stock Holdings and Corporate Tax Outcomes, by Michael Mayberry (Florida; Google Scholar), Eashwar Nagaraj (Florida) & Scott Rane (Florida; Google Scholar)
3. [287 Downloads]  The Global Minimum Tax and Intra Western Tax Competition, by Rifat Azam (Radzyner; Google Scholar)
4. [268 Downloads]  What Went Wrong In The Apple State Aid Case: Part 1 - The Case, by Ruth Mason (Virginia; Google Scholar) & Stephen Daly (King's College London; Google Scholar)
5. [226 Downloads]  The Forgotten Attribution Power, by Alex Zhang (Emory; Google Scholar) (reviewed by Blaine Saito (Ohio State; Google Scholar) here) 

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

Gamage & Shanske: What States Should Do Now, Part I

David Gamage (Missouri-Columbia; Google Scholar) & Darien Shanske (UC-Davis; Google Scholar), Winter Is Coming: What States Should Do Now, Part I, 116 Tax Notes State 297 (May 5, 2025):

This Article addresses the unprecedented fiscal challenges facing state governments as federal policy shifts threaten to create a perfect storm of revenue losses and increased service demands. As states confront potential federal cuts to essential services like Medicaid, reduced tax enforcement capacity, and possible tariff-driven economic disruption, we argue that piecemeal responses will prove insufficient.

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Weekly SSRN Tax Article Review And Roundup: Elkins Reviews What Are The Real Tax Risks For Harvard? By Dale, Hemel & Manny

This week, David Elkins (Netanya, Google Scholar) reviews Harvey P. Dale (NYU), Daniel J. Hemel (NYU) & Jill S. Manny (NYU), What Are the Real Tax Risks for Harvard?, 187 Tax Notes Fed. 1447 (May 26, 2025):

President Trump has recently indicated that what he considers untoward practices at Harvard, along with those of other elite universities, could jeopardize their status as tax-exempt institutions. Several news outlets have estimated that the value of benefits to Harvard and its donors traceable to Harvard’s tax-exempt status is in the range of half-a-billion dollars a year.

In a timely article, Profs. Dale, Hemel, and Manny discuss what the true impact of Harvard losing its tax exemption and they do so on a number of fronts: its own income tax liability, its potential liability under the corporate alternative minimum tax (AMT), its liability to other federal excise taxes, the impact on its donors, its ability to issue tax-exempt bonds, and the effect on its state and local tax liability.

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Clarke & Glogower: Apportioned Direct Taxes

Conor Clarke (Washington University; Google Scholar) & Ari Glogower (Northwestern; Google Scholar), Apportioned Direct Taxes, 79 Tax L. Rev. ___ (2026):

The Constitution requires that Congress apportion any “direct” tax among the states by population. This once-dormant provision is now the most important constitutional limitation on Congress’s taxing power. Last year, in Moore v. United States, the Supreme Court seriously considered, for the first time in decades, whether to invalidate an Act of Congress as an unapportioned direct tax. While the law survived, Moore has opened a new era in which scholars and policymakers must again take apportionment seriously. Yet the apportionment requirement remains poorly understood.

This Article provides a new perspective on apportionment by examining how Congress and Treasury sought to design and implement apportioned direct taxes.

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ERISA's Cure For The $1.4 Trillion Health Benefits Market

Amy B. Monahan (Minnesota; Google Scholar) & Barak D. Richman (George Washington; Google Scholar), Hiding in Plain Sight: ERISA's Cure for the $1.4 Trillion Health Benefits Market, 42 Yale J. on Reg. 234 (2025):

Since 1974, the Employee Retirement Income Security Act (ERISA) has imposed fiduciary duties on those who manage and administer employee benefit plans. But for the largest employee benefits—retirement benefits and health plans, which together constitute 13% of total national compensation—ERISA’s fiduciary duties have played very different roles. For retirement benefits, ERISA scrutinizes plan managers and requires employers to select plan investments with care. For health plans, there is a regulatory vacuum, as ERISA imposes few federal requirements yet preempts state efforts to ensure quality plan offerings. In short, ERISA has advanced protections for retirement plans but mostly curtailed protections for the nearly 165 million Americans who receive health insurance from employers.

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International Investment Agreements And The Global Minimum Tax

Vincent Beyer (UN Trade and Development), International Investment Agreements and the Global Minimum Tax: Of Treaty Troubles and Investment Incentives, 27 J. Int'l Econ. L. 241 (2024):

Statutory and effective tax rates have witnessed a marked decline over the past decades, prompting international tax policymakers to grapple with the challenge of tax competition. The latest tool in this struggle is the global minimum tax (GMT). This paper examines the intersection between the GMT and International Investment Agreements (IIAs). It first briefly explains the operation of the GMT and reviews how IIAs address domestic tax measures. It goes on to argue that multinational enterprises (MNEs) affected by the GMT are unlikely to file large numbers of investor-State dispute settlement cases to challenge its implementation. Instead, MNEs will leverage IIAs in seeking to replace corporate income tax incentives captured by the minimum tax with alternative economic benefits. 

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Bearer-Friend: Race-Based Tax Weapons

Jeremy Bearer-Friend (George Washington; Google Scholar), Race-Based Tax Weapons, 14 U.C. Irvine L. Rev. 1067 (2024):

In the United States, the term “poll tax” often refers to a very specific tactic of white supremacy: the use of tax policy to prevent voting by Black citizens. While “poll tax” is an accurate descriptor of these taxes, poll taxes have a much more expansive history within the twentieth century. Following in the rich tradition of comparative tax scholarship that looks at multiple jurisdictions to arrive at broader tax policy conclusions, this Article examines four distinct poll taxes applied by Anglophone governments in the twentieth century to illustrate a broad phenomenon I call “tax weapons”—the use of tax policy to harm political adversaries.

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The Global Effects Of Carbon Border Adjustment Mechanisms

Kimberly A. Clausing (UCLA; Google Scholar), Jonathan Colmer (Virginia; Google Scholar), Allan Hsiao (Stanford; Google Scholar) & Catherine Wolfram (MIT; Google Scholar), The Global Effects of Carbon Border Adjustment Mechanisms:

We study carbon border adjustment mechanism (CBAM) policies, as currently being implemented by the EU and UK. Policy discussions have cited three motivations and one concern. CBAMs can improve domestic competitiveness in regulated markets, reduce emissions leakage to unregulated markets, and encourage other countries to tax carbon. But CBAMs may particularly disadvantage lower-income trading partners. We evaluate these forces with a quantitative equilibrium model and plantlevel data on aluminum and steel production worldwide. Our data cover the most emissions-intensive and heavily traded sectors targeted in the first phase of EU and UK implementation.

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Crawford: Six Ways Of Looking At The Climate Crisis

Bridget J. Crawford (Pace; Google Scholar), Six Ways of Looking at the Climate Crisis, 43 Pace Env’t L. Rev. ___ (2026):

This Essay introduces the symposium issue of the Pace Environmental Law Review featuring six works presented at the March 2025 conference on "Taxation, the Environment, and Climate Change." This Essay identifies and explores three common themes in the articles: (1) the role of taxation in environmental protection, (2) the tax law's impact on human behavior, and (3) the optimal design for tax laws to mitigate climate change. It engages with the contributions by Tracey M. Roberts (W(h)ither Regulation? Hither to the Tax System), Samuel D. Brunson (Environmental Purpose and the Tax-Exempt Sector), Wei Cui (Understanding Output-Based Pricing Systems), Giedre Lideikyte Huber (Taxes and Aviation: A Comparative Constitutional Perspective), Sam Carvalho (Using the Tax Code to Promote Residential Energy Efficiency: A Case Study of Heat Pump Incentives), and Genevieve L. Tokić (A Tax Policy Analysis of the Inflation Reduction Act's Climate Measures). 

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Kamin: Distribution Reimagined — Determining A Policy's Ultimate Financing

David Kamin (NYU), Distribution Reimagined: Determining a Policy's Ultimate Financing, 63 Harv. J. on Legis. ___ (2026):

Policymakers are considering enacting either a new spending program or a tax cut. Who pays for the policy? The answer to that question is central to understanding the consequences. Yet, it is a question which, for the most part, policy analysts and scholars have left under-explored and often answered incorrectly or at least incompletely. Analysts and scholars have approached the issue in a variety of ways including simply believing what policymakers say is the financing in a given piece of legislation, assuming the financing is “distributionally neutral,” or assuming the financing comes from the income tax. These approaches are wrong and fail to capture the ultimate financing. This article suggests an alternative: causal analysis rooted in the political economy of the government. It is distribution reimagined. This article begins to explore what it means to analyze financing as a causal matter. Importantly, there will be no certainty in this endeavor—it is necessarily probabilistic and should take into account the inconsistency of policymakers over time.

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Tax Expenditures And Horizontal Equity: A Present-Day Reassessment

Nir Fishbien (Google Scholar), Tax Expenditures and Horizontal Equity: A Present-Day Reassessment, 28 Chap. L. Rev. 43 (2025):

Tax expenditures are “revenue losses attributable to provisions of the Federal tax laws which allow a special exclusion, exemption, or deduction from gross income or which provide a special credit, a preferential rate of tax, or a deferral of tax liability.” The concept of tax expenditures was coined by the first Assistant Secretary for Tax Policy, Stanley S. Surrey, in the late 1960s, and was codified by the Congressional Budget Act of 1974, which requires that a list of tax expenditures be included in the U.S. budget. The concept relies on the Haig-Simons definition of income (with certain adjustments) as the baseline, a deviation from which is considered a tax expenditure.

There are two basic problems with attempts to define tax expenditures against a Haig-Simons baseline. First, it is not clear why the Haig-Simons, and not other definitions of income, should be used as a baseline. Second, it is not clear why such deviations are normatively problematic. Put bluntly, who cares whether a specific tax provision is a deviation from some theoretical definition of income?

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Brown Reviews Newton's Closing The Opportunity Gap

Dorothy Brown (Georgetown; Google Scholar), Opportunity Zones: A Better Path Forward (JOTWELL) (reviewing Deanna S. Newton (Pepperdine), Closing the Opportunity Gap, 102 N.C. L. Rev. 1159 (2024)):

Professor Deanna S. Newton’s article, Closing the Opportunity Gap, is an example of the best of legal scholarship, one which provides a thorough critique of a well-known problem, but also engages with unique policy prescriptions designed to actually make a difference. The article discusses Opportunity Zones, introduced by the Tax Cuts and Jobs Act of 2017 and designed to “encourage investment in economically distressed areas by offering investors tax benefits.” (P. 1161.)

Professor Newton begins by acknowledging the most frequent critique of Opportunity Zones, namely “that most benefits from Opportunity Zone legislation go to wealthy investors rather than the residents within Opportunity Zones.” (P. 1161.) ...

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Symposium: International Tax Law And Policy

Symposium, International Tax Law and Policy, 58 Akron L. Rev. 1-148 (2025): 

• Andrew Duxbury (James Madison; Google Scholar), Jonathan D. Grossberg (Thomson Reuters; Google Scholar) & Genevieve Tokic (Northwestern), Reforming the Foreign Tax Credit, Subpart F, and GILTI in Light of Pillar Two, 58 Akron L. Rev. 1 (2025)
• Yariv Brauner (Florida; Google Scholar), The Foundations of International Taxation: Knocked from Post to Pillars, 58 Akron L. Rev. 39 (2025)
• Gianluigi Bizioli (University of Bergamo) & Frederico Bertocchi (University of Bergamo), Tax Arbitration and the Rule of Law: A Challenge for the Coordination of International Taxation, 58 Akron L. Rev. 63 (2025)

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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 #5. The #1 paper is #509 among 12,094 tax papers in all-time downloads.

1. [905 Downloads]  Policies to Reduce Federal Budget Deficits by Increasing Economic Growth, by Douglas Elmendorf (Harvard), Glenn Hubbard (Columbia) & Zachary Liscow (Yale)
2. [653 Downloads]  IRS Officials' Stock Holdings and Corporate Tax Outcomes, by Michael Mayberry (Florida; Google Scholar), Eashwar Nagaraj (Florida) & Scott Rane (Florida; Google Scholar)
3. [378 Downloads]  Global Tax Decluttering, by Shu-Yi Oei (Duke; Google Scholar) & Diane Ring (Boston College; Google Scholar)
4. [377 Downloads]  Bluff Without Purpose: Rethinking Trump's Tariff Policy and the Misuse of Game Theory, by Doron Narotzki (Akron; Google Scholar)
5. [240 Downloads]  What Went Wrong In The Apple State Aid Case: Part 1 - The Case, by Ruth Mason (Virginia; Google Scholar) & Stephen Daly (King's College London; Google Scholar)

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Hospitals And Local Taxation: The Troubled Tale Of Property Tax

Matthew S. Johnson (J.D. 2023, BYU), Note, Hospitals and Local Taxation: The Troubled Tale of Property Tax, 37 BYU J. Pub. L. 415 (2023):

The taxation of hospitals is plagued with subjectivity, which especially burdens nonprofit hospitals. Inconsistencies across localities further exacerbate the uncertainty encountered by nonprofit hospitals seeking local tax exemptions. While federal and state tax implications for nonprofit hospitals receive most of the attention from debaters and scholars, local property tax exemptions are also of significant value for nonprofit hospitals and have been largely overlooked. This Comment explores the policy arguments for and against nonprofit status for hospitals. It shows that while the federal government has chosen relatively bright-line rules for determining non-profit status, localities are far less predictable. 

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Weekly SSRN Tax Article Review And Roundup: Speck Reviews Taxing Electronic Agency By Elkins & Eyal

This week, Sloan Speck (Colorado; Google Scholar) reviews a new work by David Elkins (Netanya) & Mirit Eyal (Alabama; Google Scholar), Taxing Electronic Agency. 

A defining feature of large language models and other advanced artificial intelligence (AI) systems is their opacity. Humans establish an AI’s basic framework, but enormous quantities of data drive iterative processes that ultimately determine the AI’s operation and output. From this perspective, advanced AI is a black box. In Taxing Electronic Agency, David Elkins and Mirit Eyal leverage this feature of contemporary AI systems to explore the problems with, and solutions for, taxing activities mediated by advanced AI. Elkins and Eyal argue that, in U.S. federal income taxation, opacity is neither new nor unique to advanced AI, and they deploy analogical reasoning to develop a cognizable and workable path forward for addressing the taxation of advanced AI.

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Harvard Law Review Rejects 85% Of Submissions Using Race-Conscious Rubric, Including Article By Asian-American Tax Scholar

Following up on my previous posts (link below):  Washington Free Beacon (Aaron Sibarium), Exclusive: Harvard Law Review Axes 85 Percent of Submissions Using Race-Conscious Rubric, Documents Show:

When the Washington Free Beacon published documents showing how the Harvard Law Review selects articles based on race, the law review insisted those documents had been taken out of context.

The journal claimed the Free Beacon had quoted "selectively" from "five internal memos going back more than three years," adding that the Harvard Law Review "considers several thousand submissions annually."

"The Review does not consider race, ethnicity, gender, or any other protected characteristic as a basis for recommending or selecting a piece for publication," the journal wrote in a fact sheet published on May 27.

But according to new documents obtained by the Free Beacon, the law review eliminates more than 85 percent of submissions using a rubric that asks about "author diversity." And 40 percent of journal editors have cited protected characteristics when lobbying for or against articles—at one point killing a piece [The Forgotten Attribution Power, 135 Yale L.J. __ (2026)] by an Asian-American [tax] scholar, Alex Zhang [Emory], after an editor complained in a meeting that "we have too many Yale JDs and not enough Black and Latino/Latina authors." ...

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The State Of The Federal Income Tax System: Poor

Michael L. Schler (Cravath, New York), The State of the Federal Income Tax System: Poor, 187 Tax Notes Fed. 1643 (June 2, 2025):

In this report, Schler offers a pessimistic view of the state of the federal income tax system, arising from a confluence of factors related to the courts, Congress, and the executive branch. ...

I believe the state of the tax system is poor. But the Constitution requires a State of the Union address to include recommendations that are necessary and expedient.

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Newton: Inclusive Prosperity

Deanna Newton (Pepperdine), Inclusive Prosperity, 12 Texas A&M L. Rev. 1185 (2025):

Gentrification affects almost every American city to varying degrees, involving different parties with different interests. While positive changes are associated with gentrification, low-income individuals are often displaced from their communities due to increased rent costs and property values. Throughout our nation’s history, the federal government has offered tax incentives to those who invest in low-income areas that have historically suffered disinvestment. These tax incentives encourage investment by providing tax benefits and minimal investment constraints. However, because investors are not required to tailor their investments to meet the needs of communities, the unintended consequence of these programs is that residents do not typically benefit and are instead displaced from their communities. There is little in the current literature that proposes how economic development tax incentives should be practically designed to ensure community members are not displaced.

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Zelenak: Congress Should Not Make It More Profitable To Donate Than To Sell

Lawrence A. Zelenak (Duke; Google Scholar), Congress: Don’t Make It More Profitable to Donate Than to Sell, 187 Tax Notes Fed. 1443 (May 26, 2025):

Zelenak explains how the proposed 100 percent credit for donations to certain organizations would, as drafted, allow donors of appreciated securities to realize a greater after-tax profit than if they had sold the property — raising the same concerns that prompted Congress to curtail bargain sales to charity in 1969.

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The Corporate AMT Raises Little Revenue. Rescore And Repeal It.

Mason Ethington (BYU), Jeffrey L. Hoopes (North Carolina; Google Scholar) & Jacob Thornock (BYU), The Corporate AMT Raises Little Revenue. Rescore and Repeal It., 187 Tax Notes Fed. 1431 (May 26, 2025):

In this article, the authors analyze the most recent SEC disclosures from public companies about the corporate alternative minimum tax, finding that few companies pay the tax (and it thus raises little revenue) but many discuss the uncertainty it creates. ...

We examine public companies’ recent Form 10-K disclosures and analyze what they say about the corporate alternative minimum tax (referred to as “CAMT” in the filings, and in tax policy circles more broadly). We find that while many companies discuss the corporate AMT, few actually disclose paying it, and for those that do, some expect to recoup those amounts.

Our study shows that companies are disclosing few corporate AMT payments relative to the amount expected by the Joint Committee on Taxation score. In total, companies disclosed paying $572 million in corporate AMT, as compared with the roughly $35 billion expected by the JCT (as depicted in Figure 1).

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Sheffrin: Taxpayer Realization And Economic Welfare

Steven M. Sheffrin (Tulane; Google Scholar), Taxpayer Realization and Economic Welfare:

Should we tax unrealized capital gains? This paper provides a new perspective on this controversial issue by evaluating the  realization requirement as applied in modern taxation in terms of conventional measures of economic welfare. Drawing on recent academic research which measures economic welfare when asset prices can change either because of changes in discount rates or changes in cash flows, it provides new insights into the wisdom of taxing unrealized gains or losses. The bottom-line from this literature is that in the absence of changes in expected cash flows, economic welfare is directly related to the value of asset transactions (sales or purchases), not to changes in asset values. In particular, if asset values increase because of discount rate changes, taxpayer realization of the gain tracks economic welfare. Unrealized gains in this case should not be subject to tax. A key contribution of this paper is to explain the intuition behind the recent academic research and discuss in detail its relationship to the tax law concept of realization.

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Avi-Yonah & Narotzki: Deglobalization, Tax Competition, And The Potential Revival Of The Welfare State

Reuven S. Avi-Yonah (Michigan; Google Scholar) & Doron Narotzki (Akron; Google Scholar), Deglobalization, Tax Competition, And the Potential Revival Of the Welfare State, 187 Tax Notes Fed. 1041 (May 12, 2025):

Deglobalization comes at a cost, but at this point it appears to be a sustained trend. Even if this trajectory changes in the future, any reversal is likely to be gradual. In the meantime, political resistance to immigration and tariff-free imports makes a swift return to deep economic integration highly unlikely. But there is a silver lining to deglobalization in the form of increased revenue from tariffs and the potential for higher taxes on the rich and on multinationals.

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