TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Monday, March 18, 2019

Trump’s Morgan Lewis Tax Lawyer Faces House Scrutiny

DillonNational Law Journal, Trump’s Morgan Lewis Tax Lawyer Faces House Scrutiny:

The U.S. House Committee on Oversight and Reform has released two letters it sent to a former deputy White House counsel and President Donald Trump’s tax attorney requesting their appearance for a “transcribed interview.”

Committee Chairman Rep. Elijah Cummings made the request in separate letters sent Wednesday to former deputy White House counsel Stefan Passantino and Sheri Dillon, a partner at Morgan, Lewis & Bockius in Washington. Passantino has left the White House and is now a partner at Michael Best & Friedrich, and is outside counsel for the Trump Organization.

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March 18, 2019 in Tax | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, March 17, 2019

7th Circuit: § 107 Housing Allowance For 'Ministers Of The Gospel' Does Not Violate The Establishment Clause

Gaylor v. Mnuchin, No 16-cv-215 (7th Cir. Mar. 15, 2019):

Since the Founders crafted the Religion Clauses of the First Amendment, courts have grappled with the “play in the joints” between them. Walz v. Tax Comm. of City of N.Y., 397 U.S. 664, 669 (1970). This case calls us to do so once more. Freedom From Religion Foundation (“FFRF”) claims that a longstanding tax code exemption for religious housing, 26 U.S.C. § 107(2) of the Internal Revenue Code, violates the Establishment Clause. The district court agreed. The U.S. Treasury Department and several intervening religious organizations ask us to reinstate the exemption, asserting that the survival of many congregations hangs in the balance. We must decide whether excluding housing allowances from ministers’ taxable income is a law “respecting an establishment of religion” in violation of the First Amendment. ...

We conclude § 107(2) has a secular legislative purpose, its principal effect is neither to endorse nor to inhibit religion, and it does not cause excessive government entanglement. Here, “[t]here is no genuine nexus between tax exemption and establishment of religion.” Walz, 397 U.S. at 675. Section 107(2), then, does not violate the Establishment Clause under the Lemon test. ... [W]e conclude § 107(2) does not violate the Establishment Clause under the historical significance test.

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March 17, 2019 in Tax | Permalink | Comments (0)

The Top Five New Tax Papers

SSRN Logo (2018)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. [502 Downloads]  Ten Reasons to Prefer Tax Partnerships Over S-Corporations, by Bradley Borden (Brooklyn)
  2. [338 Downloads]  A Constitutional Wealth Tax, by Ari Glogower (Ohio State)
  3. [186 Downloads]  Basis of Grantor Trust Assets Before the Grantor's Death, by Jeffrey Pennell (Emory)
  4. [169 Downloads]  Tax Wars: The Battle over Taxing Global Digital Commerce, by Art Cockfied (Queen's)
  5. [138 Downloads]  The Marriage of Artificial Intelligence and Tax Law: Past, Present, and Future, by Blazej Kuzniacki (Ministry of Finance, Poland)

March 17, 2019 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, March 16, 2019

This Week's Ten Most Popular TaxProf Blog Posts

National Taxpayer Advocate: The IRS Should Either Fix Or Eliminate The Free File Program

Free FileNTA Blog, The Free File Program Is Failing to Achieve Its Objectives and Should be Substantially Improved or Eliminated:

I highlight my concerns with the IRS Free File program, which I also discussed in my 2018 Annual Report to Congress and my recent testimony before the House Ways and Means Subcommittee on Oversight. I also describe my personal experience using Free Fillable Forms and make some recommendations for improving these products. 

Background
The IRS Restructuring and Reform Act of 1998 directed the IRS to set a goal of increasing the e-file rate to at least 80 percent by 2007. In 2002, the IRS entered into an agreement with a consortium of tax software companies, known as Free File, Inc. (FFI), under which the companies would provide free tax return software to a certain percentage of U.S. taxpayers, and in exchange, the IRS would not compete with these companies by providing its own software to taxpayers. The agreement has been renewed at regular intervals, and for at least the past decade, the agreement has provided that the consortium would make free tax return software available for 70 percent of taxpayers (currently, about 105 million), particularly focusing on increasing access for economically disadvantaged and underserved communities, as measured by adjusted gross income.

The program provides two return preparation options for taxpayers that can be accessed on the IRS.gov homepage:

  • Free File Software: options for online software to guide taxpayers through return preparation available to taxpayers with incomes less than $66,000; and
  • Free File Fillable Forms: an electronic version of IRS paper forms available to all taxpayers, regardless of income.

The Services Provided by Free File, Inc. Fail to Meet the Needs of Taxpayers, and Use of the Program Continues to Decline
While e-filing has increased by over 180 percent since 2002, use of the Free File program has not. In 2018, individual taxpayers filed more than 154 million tax returns. Yet fewer than 2.5 million of those returns, or 1.6 percent, were filed using Free File software (this calculation does not include the number of taxpayers who used Free Fillable Forms to file their tax returns). Thus, about 68 percent of all taxpayers were eligible to use Free File software but did not do so—frequently paying to purchase the same or comparable software instead. In fact, use of the Free File program has decreased since 2014—meaning that taxpayers who used Free File in previous years chose a different option to file their returns in the following year.

NTA 1

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March 16, 2019 in IRS News, Tax | Permalink | Comments (0)

Friday, March 15, 2019

Weekly SSRN Tax Article Review And Roundup: Elkins Reviews Fleischer, Hemel & Leff On A Universal Basic Income

This week, David Elkins (Netanya) reviews new works by Miranda Perry Fleischer (San Diego) & Daniel Hemel (Chicago), The Architecture of Basic Income, 86 U. Chi. L. Rev. ___ (2019) and Benjamin M. Leff (American), EITC for All: A Universal Basic Income Compromise Proposal, 25 Wash. & Lee J. Rts. & Soc. Just. __ (2019):

Elkins (2018)This week saw the posting of two articles discussing the concept of universal basic income (“UBI”). It is interesting to compare and contrast two proposals for what is likely to be a focus of academic and political attention in the near future.

At the most fundamental level, the two articles take different tacks by their choice of how conceptually to integrate UBI into the current tax framework. Fleischer and Hemel compare UBI to a negative income tax. They demonstrate it that the difference between them is merely one of framing: a UBI financed by a progressive income is functionally equivalent to a negative income tax. One significant difference is that the negative income tax – like the positive income tax – is calculated on the family level, whereas UBI is calculated on the individual level. Fleischer and Hemel argue that a cash grant to each citizen and lawful permanent resident, regardless of age, would better serve the goals of reducing poverty that would a payment to families.

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March 15, 2019 in David Elkins, Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Tax Policy In The Trump Administration

Yin Presents Stanley Surrey And The Tax Legislative Process Today At Boston College

Yin (2015)George Yin (Virginia) presents Who Speaks for Tax Equity and Tax Fairness: Stanley Surrey and the Tax Legislative Process at Boston College today as part of its Tax Policy Workshop Series hosted by Jim Repetti, Diane Ring, and Shu-Yi Oei:

This article examines and assesses Stanley Surrey’s view of the federal tax legislative process. One of the most influential tax professionals of the twentieth century, Surrey is likely best known for his advocacy of specific tax policy ideas. But Surrey saw legislation as the prime route for adoption of most of his ideas, and he thus focused and provided many commentaries on the tax legislative process. He drew on extensive experience with the process, serving two lengthy terms (almost 20 years) in the Treasury Department, and remaining closely involved with it throughout his academic years.

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March 15, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Fox & Goldin: Sharp Lines And Sliding Scales In Tax Law

Edward G. Fox (Michigan) & Jacob Goldin (Stanford), Sharp Lines and Sliding Scales in Tax Law:

The law is full of sharp lines, where small changes in one’s circumstances lead to significant changes in legal treatment. In many cases, a sharp line can be smoothed out by replacing it with a sliding scale. Under a sliding scale, small changes in one’s circumstances lead to small changes in legal treatment. In this paper, we study the policy choice between sharp lines and sliding scales in tax law, focusing particularly on concerns related to efficiency, complexity, and administration. Sharp lines are dominant in tax law, especially for classifications that depend on factors other income. We argue that this dominance is unwarranted; sliding scales are often feasible in practice and better serve a variety of tax policy goals. We illustrate our claims with examples drawn from diverse areas of tax law.

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March 15, 2019 in Scholarship, Tax | Permalink | Comments (0)

Policy Implications Of Opportunity Zones

Rebecca Lester, Cody Evans & Hanna Tian (Stanford), Opportunity Zones: An Analysis of the Policy's Implications, 90 State Tax Notes (Oct. 15, 2018):

This article summarizes the Opportunity Zone incentive in the Tax Cuts and Jobs Act by providing descriptive statistics on the selected zones, outlining considerations for investors, and using data on the New Markets Tax Credit to inform expectations of investors' responses to this policy.

March 15, 2019 in Scholarship, Tax | Permalink | Comments (1)

Thursday, March 14, 2019

Holderness Presents Navigating 21st Century Tax Jurisdiction Today At Temple

Holderness (2017)Hayes Holderness (Richmond) presents Navigating 21st Century Tax Jurisdiction at Temple today as part of its Faculty Colloquium Series:

Hailed as a massive victory for the states, the Supreme Court’s 2018 decision in South Dakota v. Wayfair brought dated state tax jurisdiction standards into the twenty-first century, freeing the states to tax internet vendors. However, the decision left the larger state tax jurisdiction doctrine undertheorized and at a crossroads: should the doctrine concern itself only with notice and fairness issues akin to those found in the due process personal jurisdiction realm, or should it also concern itself with protecting interstate commerce from undue state tax burdens?

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March 14, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Typo In Father's Will Causes Bitter Dispute Between Three Minor Children And Christian School And Church

Tennessean, A Dying Man, A Typo and the Bitter Dispute Pitting 2 Nashville Religious Institutions Against 3 Children:

A dispute over an estate passed down through generations in one Tennessee family is pitting two Nashville Christian institutions in a bitter legal battle against three young children.

Nashville Christian School and Harpeth Presbyterian Church say they are two of the rightful beneficiaries to hundreds of acres of farmland and properties across Alabama, Mississippi and Tennessee that have been in the Blackburn family since the War of 1812.

Joined by the University of Mississippi and a dog rescue organization, the four nonprofits are fighting to wrest the estate away from three children, ages 3, 8 and 13, who would be the sixth generation to inherit the family lands.

Much of the property, now worth millions, has been inherited by each succeeding generation since a Blackburn was granted the land by President Andrew Jackson in the 19th century. Gideon Blackburn, a preacher, founded Harpeth Presbyterian Church in 1811.

Barry Blackburn Sr., the last to inherit the land, died in 2014 at age 48. In his will, the properties were to be held in a lifetime trust for his son, Christopher, then pass to Christopher's children.

But in 2015, Christopher Blackburn died, childless, at age 21. That's when the estate got complicated.

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March 14, 2019 in Tax | Permalink | Comments (5)

IMF Policy Paper: Corporate Taxation In The Global Economy

IMF LogoIMF Policy Paper, Corporate Taxation in the Global Economy:

The international corporate tax system is under unprecedented stress. The G-20/OECD project on Base Erosion and Profit Shifting (BEPS) has made significant progress in international tax cooperation, addressing some major weak points in the century-old architecture. But vulnerabilities remain. Limitations of the arm’s-length principle—under which transactions between related parties are to be priced as if they were between independent entities—and reliance on notions of physical presence of the taxpayer to establish a legal basis to impose income tax have allowed apparently profitable firms to pay little tax. Tax competition remains largely unaddressed. And concerns with the allocation of taxing rights across countries continue. Recent unilateral measures, moreover, jeopardize such cooperation as has been achieved.

This paper reviews alternative directions for progress. The call for taxation “where value is created” has proved an inadequate basis for real progress. There now seems quite widespread agreement that fundamental change to current norms is needed—but no agreement, as yet, on its best form.

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March 14, 2019 in Tax | Permalink | Comments (1)

Mayer: The Promises And Perils Of Using Big Data To Regulate Nonprofits

Lloyd Hitoshi Mayer (Notre Dame), The Promises and Perils of Using Big Data to Regulate Nonprofits:

For the optimist, government use of “Big Data” involves the careful collection of information from numerous sources and expert analysis of those data to reveal previously undiscovered patterns and so revolutionize the regulation of criminal behavior, education, health care, and many other areas. For the pessimist, such use involves the haphazard seizure of information to generate massive databases that render privacy an illusion and result in arbitrary and discriminatory computer-generated decisions. The reality is of course more complicated, with government use of Big Data presenting on one hand the promises of greater efficiency, effectiveness, and transparency, and on the other hand the perils of inaccurate conclusions, invasion of privacy, unintended discrimination, increased government power, and violations of other legal limits on government action.

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March 14, 2019 in Scholarship, Tax | Permalink | Comments (0)

NY Times: How A $238 Million Penthouse Turned A Long-Shot Tax On The Rich Into Reality

New York Times, How a $238 Million Penthouse Turned a Long-Shot Tax on the Rich Into Reality:

The road to the nation’s first tax on superluxury second homes may well have begun at 220 Central Park South, where a four-story, 24,000 square-foot penthouse, unfinished and unfurnished, recently sold for $238 million.

That deal — the most expensive residential sale in United States history — seemingly set the stage for New York’s sudden embrace of a so-called pied-à-terre tax, a potential windfall for the city’s subway system and a small, subtle victory for those who believe Manhattan has become an unfettered playground for the rich.

If the measure is passed and signed into law, New York would join cosmopolitan hubs like Paris, Singapore and Vancouver, which already charge fees on secondary or part-time homes. It would also be a prime example of how headlines and hard times can sometimes intersect with a political moment, giving an outre idea a chance to become policy.

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March 14, 2019 in Tax | Permalink | Comments (4)

Wednesday, March 13, 2019

Grewal Presents The President's Tax Returns Today At UCLA

Grewal (2019)Andy Grewal (Iowa) presents The President's Tax Returns at UCLA today as part of its Colloquium on Tax Policy and Public Finance hosted by Jason Oh:

For around 40 years, U.S. Presidents and major-party Presidential candidates have publicly released their personal income tax returns. However, during the last election cycle, candidate Donald Trump broke from this recent tradition and did not disclose them. This nondisclosure ultimately did not imperil his candidacy, and he became the 45th President of the United States.

But calls for the President’s tax returns have continued. Many Democratic legislators believe that the President’s tax returns could contain important information related to his apparent conflicts of interest and his foreign connections. However, for the last two years, the Republican-controlled Senate and House of Representatives declined to pursue those returns.

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March 13, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (2)

Mehrotra Presents T.S. Adams And The Beginning Of The Value-Added Tax Today At Toronto

Mehrotra (2017)Ajay Mehotra (American Bar Foundation; Northwestern) presents Economic Expertise, Democratic Constraints, and the Historical Irony of U.S. Tax Policy: Thomas S. Adams and the Beginnings of the Value-Added Tax at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:

When one examines how modern nation-states generate public revenue, the United States quickly emerges as a striking outlier compared to other advanced industrialized countries. Even a cursory review of statistics from the Organization for Economic Cooperation and Development (OECD) shows that the United States is out of step with the rest of the developed world in the amount, and the way, it raises tax revenue. One reason for this apparent American tax exceptionalism is the absence of a U.S. national consumption tax. Whereas nearly all other OECD countries have a national consumption tax, frequently in the form of a value-added tax (VAT), the United States remains one of the few countries without a consumption tax at the federal level. This project explores how and why the United States has historically rejected national consumption taxes.

Nearly all developed countries, and many in the developing world, have some type of a national consumption tax, frequently in the form of a value-added tax (VAT). The United States is an exception. This project focuses on the fundamental question: why no VAT in the United States? To address this overall research question, this project explores three key historical periods.

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March 13, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Tax Implications Of The College Admissions Scandal

CNBC, Taxes and Penalties May Await Wealthy Parents in College Admissions Scam:

Wealthy parents ensnared in a massive college admissions scheme may have another worry on the horizon: the IRS.

Two famous actresses and a group of executives are among the 50 people facing charges in a massive cheating conspiracy to help their children get into elite colleges, according to law enforcement officials.

The scheme allegedly involved parents paying William "Rick" Singer of Newport Beach, California, so that he could facilitate cheating on the SAT and ACT entrance exams, according to the 204-page affidavit.

These payments, which ran from $15,000 to $75,000 per test, were allegedly structured as donations to the Key Worldwide Foundation, a non-profit that Singer established as a charity, according to law enforcement officials.

Parents also allegedly paid Singer a purported $25 million to bribe coaches and college administrators to designate the children as athletic recruits, according to the complaint.

The parents also made these payments under the guise of charitable donations to the foundation, law enforcement officials allege.

"Many clients then filed personal tax returns that falsely reported the payment to the KWF as charitable donations," federal authorities said.

Under normal circumstances, charitable donations are deductible if you itemize on your income tax return.

However if those payments were fraudulent, the IRS could claw back those breaks and hit the "donors" with penalties, tax professors said.

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March 13, 2019 in Tax | Permalink | Comments (2)

2020 U.S. News Tax Rankings

6a00d8341c4eab53ef0240a490199b200b-250wiAs I blogged last fall, U.S. News has dramatically changed their ranking of nine law school specialty programs:

Law school specialty rankings ... are based solely on peer assessments by law school faculty who teach in that specialty area. The peer assessment surveys for the specialty law school area rankings were conducted in fall 2018 and early 2019 by U.S. News.

This year for the first time, law school faculty members who teach in each specialty area rated the other law schools in that specialty area on a 5-point scale. Those schools with the highest average scores among those raters who rated them appear in the rankings and are ranked in descending order based on their average peer score they received in that specialty area. In all the previous law school specialty rankings, the law school raters chose their top 15 in a specialty area. This new methodology produced a significantly larger number of schools that were ranked in each specialty area – in some cases five or six times more. ... [A]ll programs that received 10 or more ratings are numerically ranked in that specialty. Schools with less than 10 ratings in a specialty aren't listed. [The response rate of the tax faculty survey was 50%.].

The new 2020 U.S. News Tax Rankings include the tax programs at 175 law schools. Here are the Top 50:

Rank Score School
1 4.9 NYU
2 4.5 Georgetown
3 4.4 Florida
4 4.2 Northwestern
5 4.1 Virginia
6 4.0 Columbia
6 4.0 Stanford
8 3.9 Harvard
8 3.9 UC-Irvine
8 3.9 UCLA
11 3.8 Chicago
11 3.8 Michigan
11 3.8 Pennsylvania
14 3.7 Boston College
14 3.7 Boston University
14 3.7 Duke
14 3.7 Loyola-L.A.
14 3.7 USC
14 3.7 Texas
20 3.6 Indiana (Maurer)
20 3.6 Yale
22 3.5 San Diego
23 3.4 UC-Berkeley
24 3.2 Miami
25 3.1 Temple
25 3.1 UC-Hastings
25 3.1 Minnesota
25 3.1 North Carolina
25 3.1 Pittsburgh
25 3.1 Univ. of Washington
25 3.1 Villanova
32 3.0 Florida State
32 3.0 Fordham
32 3.0 George Washington
32 3.0 Pepperdine
32 3.0 UC-Davis
37 2.9 BYU
37 2.9 Alabama
37 2.9 Georgia
37 2.9 Houston
37 2.9 Washington & Lee
37 2.9 Washington Univ.
43 2.8 Arizona State
43 2.8 Georgia State
43 2.8 Notre Dame
46 2.7 Brooklyn
46 2.7 Emory
46 2.7 Ohio State
46 2.7 Tulane
46 2.7 Illinois
46 2.7 Iowa
46 2.7 William & Mary

Among the law schools in the tax rankings last year, ranked last year Here are the biggest upward moves:

  • +13:  Stanford (#6)
  • +8:  Chicago (#11), Penn (#11)
  • +6:  Columbia (#6)
  • +5:  Duke (#14)

Here are the biggest downward moves:

  • -30:  Denver (55)
  • -8:  Univ. of Washington (#25)
  • -7:  Boston University (#14)
  • -6:  Loyola-L.A. (#14), San Diego (#22)
  • -5:  Yale (#20)

Here are the rankings of law schools with graduate tax programs:

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March 13, 2019 in Law School Rankings, Legal Education, Tax | Permalink | Comments (1)

Afield: Social Justice And The Low-Income Taxpayer

W. Edward Afield (Georgia State), Social Justice and the Low-Income Taxpayer, 64 Vill. L. Rev. ___ (2019):

Tax justice is social justice. To those regularly working to resolve tax controversies for low-income taxpayers and who are often dealing with the financial implications of life and death issues like human trafficking, the ability to afford medical care, and the risks of financial despair leading to suicide, this is an uncontroversial statement. To those for whom “tax attorney” is often the punchline to their favorite lawyer joke, however, this statement appears not to fit in with traditional conceptions of social justice. This is particularly true when social justice is defined as requiring not just improved access to representation in any type of legal matter but also as requiring specific societal outcomes that reduce poverty, improve housing access, combat racial discrimination, reduce hunger, and improve healthcare access. At first blush to those outside the tax bar who do not appreciate that most of these issues are inextricably linked to the tax system, tax justice does not appear to do any of these things. Accordingly, tax issues are often overlooked in the conversation about improving social justice.

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March 13, 2019 in Scholarship, Tax | Permalink | Comments (1)

NY Times: Lawmakers Support ‘Pied-à-Terre’ Tax On Multimillion-Dollar Second Homes

New York Times, Lawmakers Support ‘Pied-à-Terre’ Tax on Multimillion-Dollar Second Homes:

A plan to tax the rich on multimillion-dollar second homes in New York City has rapidly moved closer to reality, as legislative leaders in Albany and Gov. Andrew M. Cuomo have all signed off on the idea as a funding stream for the city’s beleaguered subway system.

Mr. Cuomo said on Monday there was a consensus among the state’s leaders, all Democrats, that a so-called pied-à-terre tax was a good idea, calling it the “only agreed-to new money” for a state facing a significant drop in tax revenue.

The purchase of a $238 million apartment on Central Park South by Kenneth C. Griffin, a hedge fund billionaire with an estimated net worth of $10 billion, may have helped make the legislation more feasible, proponents said.

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March 13, 2019 in Tax | Permalink | Comments (3)

Tuesday, March 12, 2019

Homonoff Presents Program Recertification Costs: Evidence From SNAP Today At NYU

HomonoffTatiana Homonoff (NYU) presents Program Recertification Costs: Evidence from SNAP at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

We document low rates of recertification for the Supplemental Nutritional Assistance Program (SNAP) which we attribute to procedural issues associated with the recertification process. We find that current recipients — who must complete a recertification interview by the end of their recertification month — are 19 percent less likely to recertify when assigned an interview date at the end rather than at the beginning of the month. The results persist when conditioning on eligibility and are larger for long-term recipients and households with children, suggesting hassle costs associated with later interview dates worsen targeting efficiency both in terms of eligibility and need.

Conclusion. In this paper, we demonstrate that administrative burden associated with the SNAP recertification process leads to significantly lower rates of recertification success. Cases that are randomly assigned to initial interview dates at the beginning of the recertification month are 19 percent more likely to recertify than cases assigned to interviews at the end of the month. Our estimates are unchanged when conditioning on likely eligibility for the program. Such large differences in recertification success are particularly surprising given the ease with which cases may reschedule their assigned date. We find that the vast majority of the cases who fail recertification as a result of interview assignment successfully reapply for the program within the 90 days post-recertification, though we also find a small but significant effect of interview assignment on the likelihood of remaining off the program for over 90 days despite maintained eligibility. Additionally, the decrease in administrative costs associated with cases that churn more than offset the increase in costs of increased benefit distribution for these cases. While current federal law requires that SNAP recipients must complete a caseworker interview to recertify, the scheduling and timing of these interviews is at the discretion of the counties meaning that our suggested policy could be implemented without a waiver or a regulation change.

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March 12, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

The Source Of American Exceptionalism: Tax Morale

AtlanticThe Atlantic, Why Americans Don’t Cheat on Their Taxes:

If such a thing as American exceptionalism remains, maybe it can be found in this: Despite deep IRS budget cuts, an average audit rate that has plunged in recent years to just 0.6 percent, and a president who has bragged that dodging federal taxes is “smart,” most Americans still pay their income taxes every year. Even more remarkable, most of us feel obliged to pay. To quote the findings of a 2017 IRS survey: “The majority of Americans (88%) say it is not at all acceptable to cheat on taxes; this ethical attitude is not changing over time.”

True, tax crooks might not confess their real feelings in an IRS survey. But other data confirm that the U.S. is among the world’s leaders when it comes to what economists call the voluntary compliance rate (VCR). In recent decades, America’s VCR has consistently hovered between 81 and 84 percent. Most countries don’t calculate their VCR regularly, but when they do, they lag behind the U.S. One paper that gathered what comparative data were available reported that Germany, the top European Union economy, had a VCR of 68 percent.

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March 12, 2019 in Tax | Permalink | Comments (2)

Morse Reviews Sugin's The Social Meaning Of The Tax Cuts And Jobs Act

Jotwell (Tax) (2016)Susan Morse (Texas), Morality and the 2017 Tax Act (JOTWELL) (reviewing Linda Sugin (Fordham), The Social Meaning of the Tax Cuts and Jobs Act, 128 Yale L.J. Forum (Oct. 25, 2018)):

I am on alert for tax law changes as I teach Federal Income Tax this semester for the first time since the passage of the 2017 tax act. They seem to appear out of nowhere, rather than as part of a predictable pattern. What can explain seemingly disconnected provisions, scattered throughout the Code and enacted without an explicit policy explanation?

Linda Sugin takes on this question in The Social Meaning of the Tax Cuts and Jobs Act, published in 2018 at the Yale Law Journal Forum. Her critical perspective makes an effort to divine the worldview embedded in the TCJA based on the content of the enacted law. Sugin’s engineering effort shows the following “American priorities and values revealed by the TCJA:

  1. The traditional family is best;
  2. Individuals have greater entitlement to their capital than to their labor;
  3. People are autonomous individuals;
  4. Charity is for the rich; and
  5. Physical things are important.”

Sugin reviews dozens of provisions to support her arguments. ...

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March 12, 2019 in Scholarship, Tax | Permalink | Comments (1)

ABA Tax Section Publishes New Issue Of Tax Times

ABA Tax Times (2016)The ABA Tax Section has published 38 Tax Times No. 2 (Feb. 2019):

FROM THE CHAIR
Your Changing Tax Section
By Eric Solomon (Ernst & Young, Washington, D.C.)
The Tax Section held its Midyear Tax Meeting in New Orleans on January 17-19. Numerous panels addressed the continuing deluge of guidance relating to the 2017 Tax Act, such as proposed regulations regarding qualified opportunity funds and final regulations regarding the 20% deduction for sole proprietors and owners of pass-through entities (section 199A), as well as additional guidance regarding the many new international tax provisions.

PEOPLE IN TAX
Interview with Jeremiah Coder
By Thomas D. Greenaway (KPMG, Boston, MA)
The Tax Times interviewed Jeremiah Coder, a contributing author to The National Law Review and past contributing editor of Tax Analysts.

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March 12, 2019 in ABA Tax Section, Tax | Permalink | Comments (0)

Monday, March 11, 2019

Clausing Presents The Progressive Case For Free Trade, Immigration, And Global Capital Today At NYU

OpenKimberly Clausing (Reed College) presents Open: he Progressive Case for Free Trade, Immigration, and Global Capital (Harvard University Press 2019) today at NYUTimothy Noah (Politico) is the moderator and Dan Shaviro (NYU) is the commentator.

With the winds of trade war blowing as they have not done in decades, and Left and Right flirting with protectionism, a leading economist forcefully shows how a free and open economy is still the best way to advance the interests of working Americans.

Globalization has a bad name. Critics on the left have long attacked it for exploiting the poor and undermining labor. Today, the Right challenges globalization for tilting the field against advanced economies. Kimberly Clausing faces down the critics from both sides, demonstrating in this vivid and compelling account that open economies are a force for good, not least in helping the most vulnerable.

A leading authority on corporate taxation and an advocate of a more equal economy, Clausing agrees that Americans, especially those with middle and lower incomes, face stark economic challenges. But these problems do not require us to retreat from the global economy. On the contrary, she shows, an open economy overwhelmingly helps. International trade makes countries richer, raises living standards, benefits consumers, and brings nations together. Global capital mobility helps both borrowers and lenders. International business improves efficiency and fosters innovation. And immigration remains one of America’s greatest strengths, as newcomers play an essential role in economic growth, innovation, and entrepreneurship. Closing the door to the benefits of an open economy would cause untold damage. Instead, Clausing outlines a progressive agenda to manage globalization more effectively, presenting strategies to equip workers for a modern economy, improve tax policy, and establish a better partnership between labor and the business community.

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March 11, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

High Taxes Be Damned, The Rich Keep Moving To California

CaliforniaLos Angeles Times, High Taxes be Damned, the Rich Keep Moving to California:

Are rich people fleeing California to escape astronomical state income taxes? That’s the word. But it’s fake news.

In fact, more wealthy people are moving to California than leaving, research indicates. It’s the poor and middle class who are departing.

It makes sense. If you’re getting rich in California and can afford to live comfortably here in this balmy climate, there’s little incentive to leave — except to stick it to the tax collector in Sacramento. ...

Loren Kaye, president of the California Foundation for Commerce and Education, a chamber affiliate, cautions: “You can’t shelter your income simply by moving out of state. If your business or work is in California, that’s where you’re taxed. California very aggressively collects taxes.”

But, he adds: “If you’re retired or living off of investments, that’s different.” You can move to Nevada, where there’s no state income tax, and live off a California public pension without paying either Sacramento or Carson City. ...

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March 11, 2019 in Tax | Permalink | Comments (4)

Lesson From The Tax Court: Murphy’s Law Of Mailing

Tax Court (2017)When something goes right most of the time, we generally are not prepared for when it goes wrong.  Last week’s opinion in Teri Jordan v. Commissioner, T.C. Memo. 2019-15 (Mar. 4, 2019) (Judge Buch) teaches that lesson as applied to the §7502 statutory mailbox rule.  It also teaches us what we need to know to avoid the unhappy outcome for Ms. Jordan.

Most folks know something about the statutory mailbox rule in §7502.  Or at least think they do.  Almost everyone has a general idea if they mail their tax returns or, as here, their Tax Court petition on the last day of the deadline for filing, all will be well.  That generally works out for them because the U.S. mail is reliable.  That reliability leads many folks to think they can print off a stamp or postage label from an internet provider and drop the petition off at their nearest U.S. Post Office (USPS).  Or taking it to the counter of a Fed Ex or UPS “store” is the same as taking it to a USPS counter.  Again, those actions usually result in a timely petition. 

More savvy (or cautious) taxpayers, however, not only know the mailbox rule, they also know Murphy’s law.  They know the best way to beat Murphy’s law of mailing is to use Registered Mail or Certified Mail.  Ms. Jordan was not one of the savvy.  She  used a private postage label printed out from Endicia.com to mail her Tax Court petition.  That proved to be a mistake.  To see how her case is a lesson for all of us, read on.

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March 11, 2019 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure | Permalink | Comments (7)

Hemel: Democrats Demanded Trump's Tax Returns. Then They Dragged Their Feet.

Trump Tax ReturnsPolitico op-ed:  Democrats Demanded Trump's Tax Returns. Then They Dragged Their Feet., by Daniel J. Hemel (Chicago):

The House has the authority to request anyone's tax documents. But, inexplicably, the leadership has taken it slow.

Demanding the president’s tax returns “is one of the first things we’d do” when Democrats control the House of Representatives, now-Speaker Nancy Pelosi told her hometown San Francisco Chronicle less than a month before the November 2018 midterm elections swept her party back into power. “[T]hat’s the easiest thing in the world,” she added. Congress is a “co-equal body of government,” and “[w]e have to have the truth.”

But more than two months after Pelosi took the speaker’s gavel, President Donald Trump’s tax returns are still sitting in an IRS file cabinet, and no member of the “co-equal” Congress has had a look. Rep. Bill Pascrell (D-N.J) says his party will issue a formal demand for Trump’s returns in mid- to late March, but the one House Democrat who has the statutory authority to obtain the documents — Ways and Means Committee Chairman Richard Neal (D-Mass.) — insists he still doesn’t “have a timeline” for moving forward on the matter.

Voters who took Pelosi at her word last fall are right to feel frustrated. Obtaining the president’s tax returns was never going to be “the easiest thing in the world,” and it will likely require a legal battle that could go all the way to the Supreme Court. For that reason, it was important for House Democrats to think strategically about how to build the best case. But as weeks turn into months, the Democrats’ plodding progress starts to look less like strategizing and more like foot-dragging.

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March 11, 2019 in Tax | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, March 10, 2019

Providing Online Access To Everyone's Tax Returns Makes A Nation Happier

Ricardo Perez-Truglia (UCLA), The Effects of Income Transparency on Well-Being: Evidence from a Natural Experiment (NBER Mar. 6, 2019):

In 2001, Norwegian tax records became easily accessible online, allowing everyone in the country to observe the incomes of everyone else. According to the income comparisons model, this change in transparency can widen the gap in well-being between richer and poorer individuals. We test this hypothesis using survey data from 1985–2013. Using multiple identification strategies, we show that the higher transparency increased the gap in happiness between richer and poorer individuals by 29%, and it increased the life satisfaction gap by 21%. We provide suggestive evidence that some, although probably not all, of this effect relates to changes in self-perceptions of relative income. We provide back-of-the-envelope estimates of the importance of income comparisons, and discuss implications for the ongoing debate on transparency policies.

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March 10, 2019 in Scholarship, Tax | Permalink | Comments (0)

The Top Five New Tax Papers

SSRN Logo (2018)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. [489 Downloads]  Ten Reasons to Prefer Tax Partnerships Over S-Corporations, by Bradley Borden (Brooklyn)
  2. [345 Downloads]  The Proposed Section 163(j) Regulations, by David Miller, Sejin Park, Mani Kakkar & Sean Webb (Proskauer)
  3. [316 Downloads]  A Constitutional Wealth Tax, by Ari Glogower (Ohio State)
  4. [181 Downloads]  Basis of Grantor Trust Assets Before the Grantor's Death, by Jeffrey Pennell (Emory)
  5. [152 Downloads]  Tax Wars: The Battle over Taxing Global Digital Commerce, by Art Cockfied (Queen's)

March 10, 2019 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, March 9, 2019

This Week's Ten Most Popular TaxProf Blog Posts

WSJ: The Trouble With Taxing Wealth

Wall Street Journal, The Trouble With Taxing Wealth:

Elizabeth Warren’s proposed tax on net worth seems like a nearly surgical strike at inequality, but it may not be efficient.

Around the world, governments in recent decades have sought to lighten the burden on capital by reducing taxes on dividends, capital gains, corporate profits and wealth. The motivation is straightforward: more capital means more investment, higher productivity and faster growing wages. Capital is also highly mobile: Tax it too much, and it will go elsewhere, undermining growth.

Massachusetts senator and Democratic presidential contender Elizabeth Warren has broken with that consensus by proposing a tax of 2% on net worth above $50 million and 3% above $1 billion. It may never be enacted; yet in spirit it marks a historic pivot in the focus of capital taxation, from growth to inequality.

While there is no “right” level of inequality, it stands near historic highs and Democrats are unified in wanting to reduce it. Taxing wealth is an immensely appealing, nearly surgical strike at its most glaring manifestation. Yet it may not be an efficient response.

Income consists of money received each year in the form of wages, benefits, interest, dividends, capital gains and government transfers. Wealth consists of income you’ve saved over your lifetime or inherited, then invested in assets such as cash, bonds, stocks, property and stakes in a business, minus debts.

Wealth has always been more skewed than income and the imbalance has grown since the financial crisis. The median U.S. family’s income, adjusted for inflation, fell 4% between 2007 and 2016, while its wealth plummeted 20%, according to Federal Reserve figures. For the richest 10% of families, median income rose 9% while wealth leapt 27%. More than 80% of American households had less wealth in 2016 than on the eve of the last recession, in great part because their homes, the principal asset for most families, were below their precrisis values whereas stocks, whose ownership is concentrated among the rich, have roughly doubled since 2007.

WSJ

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March 9, 2019 in Tax | Permalink | Comments (3)

Friday, March 8, 2019

Tax Policy In The Trump Administration

Herzig: Supreme Court To Consider Proper State To Tax Trusts

David Herzig (Ernst & Young), U.S. Supreme Court Considers Proper State To Tax Trusts:

I love tax nexus cases! When the U.S. Supreme Court granted certiorari in North Carolina Department of Revenue v. The Kimberley Rice Kaestner 1992 Family Trust, No. 18-457 (Kaestner Trust) in January, I expected a flood of commentary. But, to date, very little attention has been paid to what is perhaps the most important state tax taxation and trust case in decades.

The problem in Kaestner Trust seems simple: In which state is a trust subject to taxation?

Of course, the question presented is more difficult, e.g., does the Due Process clause of the U.S. Constitution prohibit North Carolina from taxing the undistributed income of a New York trust based on a beneficiary’s residency in North Carolina? But the basic question is important and certain to force trustees to focus on state tax consequences. ...

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March 8, 2019 in New Cases, Tax | Permalink | Comments (0)

Layser: The Pro-Gentrification Origins Of Place-Based Investment Tax Incentives

Michelle D. Layser (Illinois), The Pro-Gentrification Origins of Place-Based Investment Tax Incentives and a Path Toward Community Oriented Reform, 2019 Wis. L. Rev. ___:

Place-based investment tax incentives, which encourage taxpayers to invest in poor areas, constitute a particularly controversial, yet undertheorized, category of tax laws. The central problem presented by current place-based investment tax incentives is a contradiction between rhetoric and reality. They are presented as laws that benefit low-income communities, yet the dominant types of place-based investment tax incentives are not designed for this purpose. Understanding the reasons for this disconnect is key to assessing the limits and potential of place-based investment tax incentives as anti-poverty tools. By tracing the development of place-based investment tax incentives to their pro-gentrification origins, this Article argues that what many anti-poverty advocates view as a flaw—the lack of safeguards for poor communities that allegedly opens the door to abuses—is, in fact, a feature of most current place-based investment tax incentives.

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March 8, 2019 in Scholarship, Tax | Permalink | Comments (0)

How To Think About Taxing And Spending Like A Swede

New York Times op-ed:  How to Think About Taxing and Spending Like a Swede, by Monica Prasad (Northwestern):

Europe has less inequality and more social mobility because its taxation schemes reach deeper into society and do more for everyone.

In the recent rush of proposals to tax the rich, Democrats have forgotten — or never really cared to learn — an important lesson: The countries that have been most successful at reducing poverty and inequality have not done it by taxing the wealthy and giving to the poor.

Take Sweden, a country often cited by progressives for its extensive social programs. Sweden has very low poverty and inequality, and economic mobility is significantly higher than it is in the United States; a poor Swede is much more likely to become middle class than a poor American is.

We can learn from Sweden, but the lesson is not what many people think. Rich Swedes do get taxed at high rates, but so does everyone else: The average American worker’s total tax burden is 31.7 percent of earnings, compared with 42.9 percent for the average Swede. The Swedes actually tax corporations less: 19.8 percent, compared with 34.2 percent in the United States in 2017, the last year for which we have comparative data — and yes, that’s after all the loopholes and deductions have been accounted for. The American rate will be lower after the 2017 tax bill, but it’s still unlikely to be as low as Sweden’s. ...

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March 8, 2019 in Tax | Permalink | Comments (6)

Bryce Harper Will Save Tens Of Millions In Taxes By Spurning The Dodgers And Giants

HarperLos Angeles Times, Bryce Harper Will Save Tens of Millions in Taxes by Spurning the Dodgers and Giants:

For Major League Baseball players, three teams are at the bottom of the standings on state taxes: the Los Angeles Dodgers, San Diego Padres and San Francisco Giants.

That’s because California is in a league of its own on personal income taxes. We’ve got by far the highest state rate in the nation, topping out at 13.3%.

By contrast, Pennsylvania has a low flat rate for every taxpayer regardless of income. It’s just 3.07%. That’s one reason why superstar slugger Bryce Harper signed an eye-popping 13-year, $330-million contract last week with the Philadelphia Phillies, spurning the Dodgers and Giants.

Harper will save tens of millions in taxes by signing with the Phillies instead of a California team. “With a contract of that magnitude, it’s dramatic,” Scott Boras, Harper’s agent, says of the taxes. “It could be almost a full year’s compensation." “The Giants, Dodgers and Padres are in the worst state income tax jurisdiction in all of baseball,” Boras adds. “Players really get hit.” ...

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March 8, 2019 in Celebrity Tax Lore, Tax | Permalink | Comments (0)

Thursday, March 7, 2019

Osofsky Presents Beyond Notice-And-Comment: The Making Of The § 199A Regs Today At Duke

Osofsky (2019)Leigh Osofsky (North Carolina) presents Legislation and Comment: The Making of the Section 199A Regulations (with Shu-Yi Oei (Boston College) )at Duke today as part of its Tax Policy Workshop Series hosted by Lawrence Zelenak:

Congress passes a highly transformative but hastily drafted legal reform. Who comments in the regulatory process, when, and what are the implications? In this Article, we study these questions by examining how the regulatory process has unfolded in the case of § 199A, one of the central provisions from the monumental 2017 tax reform.

We document the comments that went into making the § 199A regulations from the time of legislative enactment through the hearing on the proposed regulations. We show that many comments were made before the proposed regulations were issued and the official administrative law notice-and-comment period had even opened. We examine how Treasury explicitly considered these comments in the proposed regulations. And we explore how these comments and other engagements—which were not wholly transparent to the public—shaped the proposed regulations and the subsequent conversation in the actual notice-and-comment period. We also investigate the role of indirect public dialogue and comments received after the official close of the notice-and-comment period.

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March 7, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Morse Presents Government-To-Robot Enforcement At Utah

Morse (2018)Susan Morse (Texas) presents Government-to-Robot Enforcement, 2019 U. Ill. L. Rev. ___ (reviewed by Orly Mazur (SMU) here), at Utah yesterday as part of its Howard H. Rolapp Distinguished Visiting Scholar program:

Automated legal systems occupy a central place in the administration of most regulatory regimes. Examples include TurboTax, wage and hour software, and self-driving cars. These systems produce results which invite examination and adjudication on a centralized, ex post basis. This is revolutionary. It means that the content of law, which technically applies to individual regulated parties, is determined centrally by interactions between the government and firms that make automated legal systems. I call this trend government-to-robot enforcement.

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March 7, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Nina Olson To Retire After 18 Years As National Taxpayer Advocate

Olson (2018)A Personal Message from the National Taxpayer Advocate:

On this date eighteen years ago — March 1, 2001 — I walked through the doors of the IRS headquarters building in Washington, DC to begin my tenure as National Taxpayer Advocate of the United States.  It was the beginning of an always fascinating, usually complicated, and yes, sometimes frustrating journey.  Along the way, I have been privileged — and I use that word in every sense — to have worked with extraordinary people — in the Taxpayer Advocate Service, in the IRS, in Treasury, in Congress, and most importantly, directly with taxpayers and their representatives.

In addition to celebrating my March 1 anniversary, I crossed another milestone a few weeks ago.  In the eyes of the Internal Revenue Code, I am now “elderly” — that is, I am now of the age to qualify for the additional credit for the elderly under IRC § 22.  This has caused me to reflect on how I want to proceed with the remaining stages of my life, and I have concluded that I am ready to move on to a new stage.

So it is with a mix of excitement and bittersweet emotions that I am announcing today I will be retiring from the position of National Taxpayer Advocate on July 31, 2019.

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March 7, 2019 in IRS News, Tax | Permalink | Comments (1)

Leslie Book Named IRS Professor-In-Residence

Book (2019)Leslie Book (Villanova) has been named Professor-in-Residence at the IRS. He joins a long line of distinguished Tax Profs who have held this important position:

  • 2010-11: Charlotte Crane (Northwestern)
  • 2009-10:  Jon Forman (Oklahoma)
  • 2008-09: David Hasen (Florida)
  • 2007-08: Greg Polsky (Georgia)
  • 2007: Calvin Johnson (Texas)
  • 2007: IRS Chief Counsel Revitalizes Professor-In-Residence Program
  • 1991-92: Alan Feld (Boston University) 
  • 1990-91: Laurence Wohl (Dayton) & Larry Zelenak (Duke)
  • 1988-89: Marilyn Brookens (Baylor), Mark Cochran (St. Mary’s) & Stanley Neeleman (BYU)
  • 1987-88: Bill Lyons (Nebraska), Scott Taylor (New Mexico)
  • 1986-87: Marty McMahon (Florida), Dan Simmons (UC-Davis)

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March 7, 2019 in IRS News, Tax | Permalink | Comments (0)

Bitcoin: The New Swiss Banks

Jason Clark & Margaret Ryznar (Indiana-Indianapolis), Bitcoin: The New Swiss Banks, 2019 U. Ill. L. Rev. Online ___ :

Bitcoin has captivated much attention and imagination since its emergence in 2009, but not enough when it comes to its tax implications. As a result, there are several areas in need of attention when it comes to the federal tax treatment of virtual currency. The right guidance in these areas would strengthen the legitimate use of virtual currency and maximize the chances for tax compliance.

March 7, 2019 in Scholarship, Tax | Permalink | Comments (0)

Wednesday, March 6, 2019

Fourth International Conference On Taxpayer Rights

Taxpayer Rights 2The National Taxpayer Advocate is convening the fourth International Conference on Taxpayer Rights (agenda) on May 23-24, 2019 at Minnesota:

The conference brings together government officials, scholars, and practitioners from around the world to explore how global taxpayer rights serve as the foundation for effective tax administration. For two days, speakers, panelists and attendees will explore the role of taxpayer rights in the digital age, and the implications of the expanding digital environment for transparency, certainty, and privacy in tax administration.

Panel discussions will focus on the following and more:

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March 6, 2019 in Conferences, IRS News, Scholarship, Tax | Permalink | Comments (0)

Fleischer & Hemel: The Architecture Of A Basic Income

Miranda Perry Fleischer (San Diego) & Daniel Jacob Hemel (Chicago), The Architecture of a Basic Income, 86 U. Chi. L. Rev. ___ (2019):

The notion of a universal basic income (“UBI”) has captivated academics, entrepreneurs, policymakers, and ordinary citizens in recent months. Pilot studies of a UBI are underway or in the works on three continents. And prominent voices from across the ideological spectrum have expressed support for a UBI or one of its variants, including libertarian Charles Murray, Facebook co-founder Chris Hughes, labor leader Andy Stern, and—most recently—former President Barack Obama. Although even the most optimistic advocates for a UBI will acknowledge that nationwide implementation lies years away, the design of a basic income will require sustained scholarly attention. This article seeks to advance the conversation among academics and policymakers about UBI implementation.

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March 6, 2019 in Scholarship, Tax | Permalink | Comments (0)

Death Of Charles Kingson

KingsonNew York Times Obituary, Charles Kingson:

Charles Isaac Kingson (Charley) of New York City died peacefully on February 26, 2019 in the company of his wife and daughter. He was 80 years old and had spent his career as a tax lawyer. Born in New York City, he attended the Horace Mann School and graduated from Phillips Exeter Academy, Harvard College and Harvard Law School. A longtime partner at Willkie, Farr and Gallagher, he served as the Treasury Department's deputy international tax counsel under the Carter Administration, where he wrote the initial regulations under section 367 of the tax code, establishing rules for reorganizations and liquidations involving foreign corporations. A gifted pianist, conversationalist and thinker, he spent his later years teaching his craft at New York University Law School, Yale Law School, Penn Law School and Columbia Law School. He leaves his beloved wife, Nancy Sharf Kingson, and daughter, Jennifer A. Kingson, and two grandchildren, Valerie Kingson Bloom and Jeffrey Kingson Bloom.

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March 6, 2019 in Obituaries, Tax | Permalink | Comments (5)

Tuesday, March 5, 2019

2019 Tannenwald Tax Writing Competition

Tannenwald (2013)The Theodore Tannenwald, Jr. Foundation for Excellence in Tax Scholarship and American College of Tax Counsel are sponsoring the 2019 Tannenwald Tax Writing Competition:

Named for the late Tax Court Judge Theodore Tannenwald, Jr., and designed to perpetuate his dedication to legal scholarship of the highest quality, the Tannenwald Writing Competition is open to all full- or part-time law school students, undergraduate or graduate. Papers on any federal or state tax-related topic may be submitted in accordance with the Competition Rules.

Prizes:

  • 1st Place:  $5,000
  • 2nd Place: $2,500
  • 3rd Place:  $1,500

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March 5, 2019 in Legal Education, Tax, Teaching | Permalink | Comments (0)

Hillier & Waerzeggers Present The Platform For Tax Collaboration: Offshore Indirect Transfers Today At Georgetown

IMF LogoChristophe Waerzeggers (IMF) & Cory Hillier (IMF) present The Platform for Collaboration on Tax: The Taxation of Offshore Indirect Transfers—A Toolkit at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by John Brooks and Lilian Faulhaber:

The tax treatment of ‘offshore indirect transfers’ (OITs)—in essence, the sale of an entity owning an asset located in one country by a resident of another—has emerged as a significant issue in many developing countries. It has been identified in IMF technical assistance work and scoping by the OECD, but was not covered by the G20-OECD project on Base Erosion and Profit Shifting (BEPS). In relation to the extractive industries, OITs are also the subject of work at the UN.

The country in which the underlying asset is located may wish to tax gains realized on such transfers—as is currently the case for direct transfers of immovable assets. Such treatment might reasonably be applied to a wider class of assets, to include more those generating location specific rents—returns that exceed the minimum required by investors and which are not available in other jurisdictions. This might include, for instance, telecom licenses and other rights issued by government. The report also recognizes, however, that gains on OITs may be attributable in part to value added by the owners and managers of such assets, and that some countries may choose not to tax gains on OITs.

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March 5, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (0)