Oei & Ring: Global Tax Decluttering

Shu-Yi Oei (Duke; Google Scholar) & Diane M. Ring (Boston College; Google Scholar), Global Tax Decluttering, 77 U.C. L.J. __ (2025):

Major global players—most prominently the OECD and European Union—have recently begun advocating that countries “declutter” their tax systems to tidy up, repeal, or eliminate pre-existing domestic anti-abuse tax rules. The reasoning is that these country-level rules are now duplicative or burdensome in light of a new global tax agreement spearheaded by the OECD and G20 and multilaterally agreed upon in 2021 by over 140 countries. Yet, this new multilateral regime is still in the process of being rolled out and is entirely untested.

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Cauble: Taxing Composite Transactions

Emily Cauble (Wisconsin; Google Scholar), Taxing Composite Transactions, 77 SMU L. Rev. 349 (2024):

In a variety of contexts, taxpayers engage in composite transactions — essentially two transactions in one. For instance, when an individual sells property for less than its fair market value to a friend or relative, the transaction involves a sale and a gift. As another example, from time to time, retailers run promotions offering to rebate the price of merchandise if a team wins a sporting event. A buyer of the merchandise, effectively, makes a purchase and also places a bet on the sporting event's outcome.

Tax law's treatment of composite transactions is not uniform. In some contexts, tax law fully bifurcates these transactions into their separate components. Under this bifurcated approach, a taxpayer who engages in a composite transaction receives the same tax treatment as a taxpayer who goes through the motions of engaging in the component transactions separately. In other contexts, tax law adopts a collapsed approach under which taxpayers obtain markedly different tax treatment by engaging in a composite transaction instead of carrying out the components as separate transactions.

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The Professional Employer Organization Regulatory Regime

Ursula Ramsey (North Carolina), The Professional Employer Organization Regulatory Regime, 20 UC L. SF Bus. J. 95 (2024)

Employment taxes constitute over thirty percent of the revenue collected by the Internal Revenue Service (“IRS”). For fiscal year 2022, the IRS’s employment tax collections totaled over 1.3 billion dollars. Over the past few decades, a new industry has emerged that provides payroll, human resources, and employment tax services to its small to mid-sized business clients.to its small to mid-sized business clients payroll, human resources, and employment tax services. On behalf of business clients, these professional employer organizations (“PEOs”) remit the employment taxes associated with 216 billion dollars in worksite employee wages. This number represents the wages of four million worksite employees. Though there are 487 PEOs operating in the United States with over 170,000 client companies, the industry has received little scholarly study. Beyond the government’s interest in the efficient collection of employment taxes, regulation in the PEO industry warrants attention to ensure that those 170,000 small businesses receive the services for which they contract. Additionally, regulation in the industry warrants attention to ensure that those four million workers receive the protections to which they are entitled by law.

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Clarke Presents Apportioned Direct Taxes Today At Columbia

Conor Clarke (Washington University; Google Scholar) presents Apportioned Direct Taxes (with Ari Glogower (Northwestern; Google Scholar)) at Columbia today as part of its Davis Polk & Wardwell Tax Policy Colloquium hosted by Michael Love:

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 signals 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 account of apportionment by examining how Congress and Treasury actually designed and implemented apportioned direct taxes. 

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Roberts: The Tax Trench Deepens

Tracey M. Roberts (Cumberland; Google Scholar), The Tax Trench Deepens, 28 Fla. Tax Rev. ___ (2025):

Congress, long divided, has been in gridlock for decades. The result has been regulatory ossification. Existing statutes lack the flexibility to manage the country’s many technological, social, environmental, sectoral, and market challenges. However, without a Senate super-majority vote to override the filibuster, new legislation fails. While the budget reconciliation process has provided one of the few pathways around the filibuster, that process is limited to budgetary outlays and revenue measures. Consequently, a “tax trench” has been worn from Congress repeatedly pushing major regulatory and public benefits legislation through the process as tax provisions. Now, the tax trench is set to deepen. Following a spate of cases decided in 2024, U.S. Supreme Court has placed a series of checks on federal regulatory authority, discretion, and enforcement capacity. 

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Bob Jones And The Conservative Case For Not Revoking Harvard's Tax Exemption

The Atlantic:  The Conservative Case for Leaving Harvard Alone, by Conor Clarke (Washington University; Google Scholar):

The Supreme Court precedent allowing the IRS to revoke a university’s tax-exempt status is a textualist’s nightmare.

The past few days have seen a dramatic escalation in the Trump administration’s brawl with universities in general and with Harvard in particular. According to multiple reports, the IRS has begun planning to revoke the university’s tax-exempt status. Losing exemption from income taxation would be disastrous for Harvard. Not only does exemption save universities enormous amounts of money that would otherwise be taxed; it is also essential for fundraising, because it allows donors to take charitable deductions.

What is the rationale for the IRS revisiting Harvard’s exemption status? A theory is needed, because section 501(c)(3) of the federal tax code says that an organization “shall”—not “may”—be exempt from taxation if it meets criteria listed in the statute. One of those criteria is for an institution to be organized exclusively for “educational purposes.”

The Trump administration—which shoots first and theorizes later—has not said much. But an intellectual agenda has been building recently to challenge the exempt status of universities and other organizations viewed as left-leaning. (You can see that momentum gathering steam on the Wall Street Journal editorial page here, here, and here.) The unifying theory of this movement is to make expansive new use of a 1983 Supreme Court decision, Bob Jones University v. United States.

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TaxProf Blog Weekend Roundup

Saturday:

• This Week's Ten Most Popular TaxProf Blog Posts
• Nearly All Elite Law Schools Move Up Summer Associate Job Interviews To May And June
• Haneman: The Liminality Of Transactional Relationships
• 2025-26 U.S. News International Law Rankings
• Tax Day At North Carolina Law School

Sunday:

• The Epic Jesus Follower Fail: The Cringe-Worthy Subplot Of Holy Week Underscores The Truth Of The Gospel
• Things Worth Remembering: The Resurrection Of The Body And The Immortality Of The Soul
• NY Times: White House Of Worship — Christian Prayer Rings Out Under Trump
• Are Faith-Based Law Schools Fairly Ranked By U.S. News?
• Can Universities (And Law Schools) Still Diversify Faculty Hiring Under Trump?
• The Top Five New Tax Papers

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 new papers debuting on the list at #3 and #4.  The #1 paper is #340 among 11,919 tax papers in all-time downloads.

1. [1,158 Downloads]  Tax Fairness: Reconceptualising Taxation and Inequalities, by Rita de la Feria (Leeds; Google Scholar)
2. [337 Downloads]  Global Tax Wars in the Digital Era, by Assaf Harpaz (Georgia; Google Scholar) (reviewed by Mirit Eyal-Cohen (Alabama; Google Scholar) here)
3. [242 Downloads]  You Play, You Pay! Mobility, Territory, And Exclusive Source Taxation In The 21st Century: , by Yariv Brauner (Florida; Google Scholar) (reviewed by Blaine Saito (Ohio State; Google Scholar) here)
4. [239 Downloads]  From Relic to Relevance, The Resurgence of Tariffs, by Reuven Avi-Yonah (Michigan; Google Scholar), Doron Narotzki (Akron; Google Scholar) & Tamir Shanan College of Management): 
5. [183 Downloads]  Formalism, Functionalism, and Nonfunctionalism in the Constitutional Law of Tax, by Daniel Hemel (NYU; Google Scholar) (reviewed by Adam Kern (San Diego; 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.

This Week's Ten Most Popular TaxProf Blog Posts

Legal Education: 

1. U.S. News, 2025-26 Law Specialty Rankings
   1. Constitutional Law
   2. Contracts/Commercial Law
   3. Criminal Law
   4. Dispute Resolution
   5. Environmental Law
   6. Health Care Law
   7. Intellectual Property Law
   8. International Law
2. Chronicle of Higher Education Op-Ed (Phillip Levine (Wellesley College & Brookings Institution)), These 77 Colleges (And 45 Law Schools) Have The Most To Lose From Trump’s Cuts
3. CUPA-HR, Tenure-Track Faculty Raises Continue To Lag All Other Higher Ed Workers; Inflation-Adjusted Salaries Are 10% Lower Than In 2017
4. MLive, Hundreds Of ‘Stunned’ Michigan Law Alums Blast DEI Cuts
5. Reuters, ‘White Students Not Eligible to Apply’: ABA Sued Over Race-Based Law School Scholarship
6. Washington Free Beacon, At ‘Wikipedia Edit-a-Thon,’ Harvard Law Students Target Pages Of Law Firms That Criticized School's Response To Anti-Semitism
7. The Walrus, UBC Law School Faces Fresh Allegations Of Discrimination
8. James Ming Chen (Michigan State), Principia Bibliometrica: Modeling Citation And Download Data In Legal Scholarship
9. ABA Journal, California Bar Still Can't Decide How To Make Applicants Whole After Botched February Bar Exam
10. Bloomberg Law, Law Students Sue EEOC Over Big Law Diversity Scrutiny

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

Tax:

1. Florida Bar, Winners Of The 2025 National Tax Moot Court Competition
2. Brian Galle (Georgetown), David Gamage (Missouri) & Bob Lord (Patriotic Millionaires), Taxing Dynasties
3. Richard Winchester (Brooklyn), Presentation Of A Tax Policing Paradox At Columbia
4. Gladriel Shobe (BYU) & Matthew Johnson (Cravath, New York), Geographic Inequality And The SALT Deduction
5. SSRN, The Top Five New Tax Papers
6. Samantha Strimling (J.D. 2024, Harvard), Good Governance Is Taxing: The Implications Of Tax Policy For Separation Of Powers And The Major Questions Doctrine
7. University of New South Wales, 16th International ATAX Tax Administration Conference: Getting It Right
8. Diane Lourdes Dick (Iowa), Creative Tax Writing At Iowa
9. Emily Cauble (Wisconsin), Channels Of Tax Law (Mis)Information
10. Manoj Viswanathan (UC Law-SF), Presentation Of Damage Award Taxation And Distributive Justice At Duke

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

Faith:

1. Christianity Today (Esau McCaulley (Wheaton College)), This Palm Sunday, Ponder Donkeys, Not Palm Branches
2. Jennifer Lee Koh (Pepperdine), Christian Lawyers In The Public Interest And Outside The Political Right
3. New York Times (Ross Douthat), Can The Jesus Of History Support The Christ Of Faith?
4. The New Yorker (Adam Gopnik), Why We Can’t Stop Talking About Jesus
5. Alistair Begg (Parkside Church, Cleveland), The Essence Of Good Friday: The Man On The Middle Cross

Editor's Note:  If you would like to receive a weekly email each Sunday with links to faith posts on TaxProf Blog, email me here. 

Haneman: The Liminality Of Transactional Relationships

Victoria J. Haneman (Creighton; Google Scholar), The Liminality of Transactional Relationships, 109 Minn. L. Rev. Headnotes 67 (2025):

The law is often uncomfortable with liminal space or the space between absolutes. Liminal space is the grey area that defies labels, and creating rules to regulate and navigate liminalities is ultimately where we often find the most important growth and change. In the world of legal theory, liminality is a space that is defined by power and possibility. Taxing Sugar Babies [109 Minn. L. Rev. 737 (2024)] by Bridget Crawford is an important exploration of our societal discomfort with transactional relationships, and the way in which that discomfort is reflected in our tax law. The term sugar dating has come to mean someone (usually a younger person) accepting money or gifts from a sugar daddy (usually an older person) in exchange for a romantic or sexual attention. 

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Tax Day At North Carolina Law School

On Tuesday, April 15th, Tax Profs Leigh Osofsky and Kathleen DeLaney Thomas hosted North Carolina Law School's annual Tax Day celebration, filling the law school rotunda with tax law students, costume contests, tax bingo, tax challenge problems, tax trivia, prizes, food, and more:

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Weekly SSRN Tax Article Review And Roundup: Saito Reviews Brauner's Mobility, Territory, And Exclusive Source Taxation

This week, Blaine Saito (Ohio State; Google Scholar) reviews a new work by Yariv Brauner (Florida; Google Scholar), You Play, You Pay! Mobility, Territory, And Exclusive Source Taxation In The 21st Century.

The international tax system's foundation is under unprecedented strain, having weathered BEPS 1.0, BEPS 2.0 with its two pillars, and now facing a competing UN initiative. But at the base of a lot of these is a specter of residence taxation. Yariv Brauner’s You Play, You Pay Mobility, Territory, and Exclusive Source Taxation in the 21^st Century forcefully outlines the problems of residency-based system and advantages for source as the exclusive means. It also addresses many of the critiques of using source as a basis for taxation. Finally, it presents some guidance on how to think of exclusive source-based international tax rules, with an emphasis that, even here, cooperation is needed, but a first mover could push the project along.

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Tax Policy In The Trump Administration

• Bloomberg, Bessent Says ‘Everything’s On the Table’ for Taxes on Wealthiest
• Bloomberg, Harvard Sees ‘Grave Consequences’ as Trump Pushes IRS Action
• Bloomberg, Harvard’s $465 Million in Tax Benefits Draw New Scrutiny
• Bloomberg, IRS Purges Old Guidance After White House Deregulation Push
• Bloomberg, Millionaire Tax-Hike Talks Gain Steam as Trump Signals Openness
• Bloomberg, New York City’s Rich Increasingly Using Trusts to Buy Homes for Their Kids
• Bloomberg, States See Low Demand for IRS’s Direct File With Future Unclear
• Bloomberg, Trump Names Whistleblower Gary Shapley as Acting IRS Head
• Bloomberg, Trump Questions Columbia, Princeton’s Tax-Exempt Status
• CNBC, Tax Attorneys Say IRS Has Become a ‘Zombie’ as Agency Cuts Staff and Halts Audits of the Wealthy

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Next Week’s Tax Workshops

Monday, April 21: Conor Clarke (Washington University; Google Scholar) will present Apportioned Direct Taxes (with Ari Glogower (Northwestern; Google Scholar)) as part of the Columbia Davis Polk & Wardwell Tax Policy Colloquium. If you would like to attend, please contact Michael Love. 

Wednesday, April 23: Shu-Yi Oei (Duke; Google Scholar) will present Global Tax Decluttering, 77 U.C. L.J. __ (2025) (with Diane Ring (Boston College; Google Scholar)) as part of the Missouri Tax Policy Colloquium. If you would like to attend, please contact David Gamage. 

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Cauble: Channels Of Tax Law (Mis)Information

Emily Cauble (Wisconsin; Google Scholar), Channels of Tax Law (Mis)Information, 2026  U. Ill. L. Rev. ___ : 

This Article sheds light on a pervasive phenomenon. In a variety of contexts, third parties provide information about tax law to taxpayers. The information provided by these third parties may guide the tax planning and compliance decisions of taxpayers, some of whom may act upon the information without seeking advice from a tax professional. In some cases, the information is accurate and potentially helpful. In other cases, it is inaccurate and potentially misleading.

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Creative Tax Writing At Iowa

Diane Lourdes Dick (Iowa), Creative Tax Writing At Iowa:

This year, I invited students in both of my Spring 2025 tax courses at the University of Iowa College of Law to participate in a new (and entirely optional!) creative writing competition.

The prompt was simple—but strange:

Imagine a world where cash no longer necessarily has a basis equal to face.

Students could respond in any narrative form—short story, poem, or something in between—and were explicitly permitted to use generative AI to assist with brainstorming, drafting, and editing. The result was a wildly creative and pedagogically rich experiment in how tax law can come alive through storytelling.

Submissions were evaluated on three criteria: tax substantive knowledge (40%), creative writing (40%), and overall quality (20%).

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2025 Tannenwald Tax Writing Competition

The Theodore Tannenwald, Jr. Foundation for Excellence in Tax Scholarship and American College of Tax Counsel are sponsoring the 2025 Tannenwald Writing Competition.

Named for the late Tax Court Judge Theodore Tannenwald, Jr., and designed to perpetuate his dedication to high-quality legal scholarship, the Tannenwald Writing Competition is open to all full- or part-time law school students in J.D., LL.M., and other graduate law programs. This is the 24th year of the competition, and over 600 entries have been received since its inception. All submissions are reviewed by a panel of tax professors and practitioners.

Papers on any federal or state tax-related topic may be submitted in accordance with the Competition Rules. ...

Prizes: 

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Clarke Presents Apportioned Direct Taxes Today At Missouri

Conor Clarke (Washington University; Google Scholar) presents Apportioned Direct Taxes (with Ari Glogower (Northwestern; Google Scholar)) at Missouri today as part of its Tax Policy Colloquium hosted by David Gamage:

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 signals 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 account of apportionment by examining how Congress and Treasury actually designed and implemented apportioned direct taxes. 

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The Normative Shift In Corporate Tax Policy After GloBE

Tarcisio Diniz Magalhães (Antwerp; Google Scholar) & Allison Christians (McGill; Google Scholar), The Normative Shift in Corporate Tax Policy after GloBE, 17 World Tax J. ___ (2025):

In the era of global minimum taxes, the merit of any given national corporate income tax will depend on which governments will be collecting corporate tax revenues, and at whose expense. This marks a shift in focus away from a century-old baseline assumption: before this era, the likelihood that a corporation would face income tax at all was in no way assured, but now, any given corporate income stream will likely be subject to tax by some government, somewhereif not yet in practice, presumably some time in the near future. This shift in assumption alters the terrain for normative policy analysis by centering questions that were formerly sidelined, especially respecting the impact of taxes on the international distribution of wealth among nations. This article examines the implications of this shift and shows why it leads to a clear understanding of corporate taxes as a key international wealth distribution tool.

Conclusion
Even before its full implementation, GloBE has shifted the focus of corporate tax policy from domestic incidence to the question of which government will ultimately collect the tax revenue. This article has demonstrated why this shift is critical, arguing that GloBE renders obsolete the traditional emphasis on domestic tax incidence. 

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Geographic Inequality And The SALT Deduction

Gladriel Shobe (BYU; Google Scholar) & Matthew S. Johnson (Cravath, New York), Geographic Inequality and the SALT Deduction: 

The state and local tax (“SALT”) deduction remains one of the most hotly contested issues in federal tax policy, and its significance will only grow as the $10,000 cap is set to expire on January 1, 2026. Much of the SALT debate has been driven by politics rather than empirical analysis, leaving key questions about the deduction’s true impact unresolved. This study moves beyond partisan narratives to provide a clearer picture of who truly gains from the SALT deduction and who bears the cost of its limitation. While the SALT deduction is often characterized as a subsidy for blue states, the reality of where the benefits flow is more complex than the straightforward red state versus blue state distinction. Nearly half of the deduction applies to local taxes, yet the local-level portion of the SALT deduction has received little attention. In the local portion of the SALT deduction, however, lie unique inequality dynamics that should be considered as part of any debate about the future of the deduction.

This Article uses a novel dataset to provide the first empirical analysis of the local portion of the SALT deduction across several states.

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Galle, Gamage & Lord: Taxing Dynasties

Brian D. Galle (Georgetown; Google Scholar), David Gamage (Missouri; Google Scholar) & Bob Lord (Patriotic Millionaires),  Taxing Dynasties, 174 U. Pa. L. Rev. ___ (2026):

The estate tax and the broader wealth-transfer-tax system are even more broken than is commonly understood. Over the past two decades, researchers and policy experts have identified a handful of key tactics that mega-rich families use to pass wealth from generation to generation without paying tax. These tax dodges are notorious enough to be known by their acronyms, such as the IDGT and the GRAT. Scholars and policymakers have proposed reforms to block these tactics, or at least to make them more difficult.

In this Article, we present new analysis, backed by new empirical findings, to show that these proposed reforms would not suffice for restoring wealth-transfer taxes to their original purpose—curbing intergenerational transmission of vast dynastic wealth and power.

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Cauble: Non-Experts' Impressions Of Informal Tax Guidance

Emily Cauble (Wisconsin; Google Scholar), Non-Experts' Impressions of Informal Tax Guidance, 76 Syracuse L. Rev. __ (2026):

I conducted a survey of 2,191 U.S. adults designed to gain insight into the impact that statements in informal IRS guidance have on non-expert taxpayers. The survey also examines whether respondents form different impressions when they receive guidance delivered by an automated tool rather than guidance contained in IRS publications. This Article reports that survey's results. 

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The First IRS Commissioner: ‘The Most Consequential Public Figure Americans Have Never Heard Of’

Harold Holzer (Director, The Roosevelt House Public Policy Institute (Hunter College)), The First IRS Commissioner: ‘The Most Consequential Public Figure Americans Have Never Heard Of’ (reviewing Jeffrey Boutwell, Boutwell: Radical Republican and Champion of Democracy (2025)):

America’s first IRS commissioner helped raise the vast sums needed to wage the Civil War and was a strong advocate of racial equality.

It took not a village of historians but a lone descendant to rescue George S. Boutwell from the dustbin of American memory. Viewed by many in his own time as both radical and rigid, “hiding in plain sight” since the post-Civil War period, Boutwell has long deserved resurrection. He was—cue the fast-approaching debate over tax cuts—America’s first IRS commissioner.

Now comes Jeffrey Boutwell—a cousin several generations removed and the author of previous books on security issues—to argue that George Boutwell ranks as “the most consequential public figure Americans have never heard of.” This commendably balanced and well-researched biography demonstrates that his kinsman is indeed worth remembering.

Born in Brookline, Mass., in 1818, George Sewall Boutwell worked on the family farm, apprenticed with a village postmaster, studied law, advanced to the state legislature, was governor at age 33 and later served as both a congressman and a U.S. senator. His greatest role was helping raise the vast sums of money needed to wage the Civil War—a staggering million dollars a day by 1862.

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Winchester Presents A Tax Policing Paradox Today At Columbia

Richard Winchester (Brooklyn) presents A Tax Policing Paradox at Columbia today as part of its Davis Polk & Wardwell Tax Policy Colloquium hosted by Michael Love:

If the government audits more taxpayers, that generally leads to higher levels of taxpayer compliance. However, this does not always happen. If the government audits taxpayers and fails to detect a specific form of tax evasion, taxpayer compliance will fall in two respects. The audited taxpayers will continue to engage in the practice that went unnoticed. In addition, as word spreads that the risk of detection or penalty is low, other taxpayers will start to engage in the same form of tax evasion.

There is one specific form of tax evasion that is unlikely to receive the scrutiny it deserves even as the Internal Revenue Service gears up to spend a huge injection of money to police taxpayers more frequently. It is often called the S corporation employment tax dodge and it works like this. If a closely held S corporation has an owner who also works for the firm, that individual can access the company’s earnings in two ways: as compensation for their work or as a distribution of profits. The main difference is that distributions are not subject to employment tax, while compensation is. So, the low-tax option is for the employee-owner to work for free and to cause the firm to pay them a distribution that is nothing more than disguised compensation.

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Trafficking-In And Harvesting Tax Benefits May Be Subject To Restrictions And Limitations

Ray A. Knight (Elon) & Dr. Lee G. Knight (Wake Forest), Trafficking-In and Harvesting Tax Benefits May Be Subject to Restrictions and Limitations, 46 Campbell L. Rev. 51 (2023): 

Trafficking in and harvesting preexisting or manufactured tax losses and credits may be both beneficial and lucrative, but it may be subject to restrictions and limitations. Internal Revenue Code (“IRC”) Section 269 generally provides that acquisition of control of a corporation to gain the benefit of a deduction, credit, or other allowance is prohibited. Does the Section 269 prohibition present a concrete barrier or is it just a smoke screen? This article examines the business purpose and economic substance doctrines to explain ways to circumvent Section 269. 

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Raskolnikov: Taxing The Ten Percent

Alex Raskolnikov (Columbia), Taxing the Ten Percent, 62 Hous. L. Rev. 57 (2024):

The United States government is rapidly approaching the point when it will have no choice but to raise taxes. But whose taxes should go up, and why? The argument for higher taxes on the top one percent is well known. The case for higher taxes on the next nine percent is not. This Article makes that case.

Americans with incomes in the top ten percent but not the top one percent are not rich, but they are not middle class either—they are affluent. These affluent Americans have seen mostly tax cuts over the past three decades.

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TaxProf Blog Weekend Roundup

Saturday:

• This Week's Ten Most Popular TaxProf Blog Posts
• 7th Circuit Judicial Council Dismisses Misconduct Complaint Against Federal Judge For Columbia Law Clerk Boycott
• Good Governance Is Taxing: The Implications Of Tax Policy For Separation Of Powers And The Major Questions Doctrine
• 2025-26 U.S. News Constitutional Law Rankings
• Winners Of The 2025 National Tax Moot Court Competition

Sunday:

• This Palm Sunday, Ponder Donkeys, Not Palm Branches
• Good Friday Reminds Us Of The Ephemerality Of Human Power
• The Essence Of Good Friday: The Man On The Middle Cross
• Praying In The Shadow Of Gethsemane And Good Friday
• Tenure-Track Faculty Raises Continue To Lag All Other Higher Ed Workers; Inflation-Adjusted Salaries Are 10% Lower Than In 2017
• 2025-26 U.S. News Contracts/Commercial Law Rankings
• The Top Five New Tax Papers

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 new papers debuting on the list at #3 and #4.  The #1 paper is #340 among 11,919 tax papers in all-time downloads.

1. [1,137 Downloads]  Tax Fairness: Reconceptualising Taxation and Inequalities, by Rita de la Feria (Leeds; Google Scholar)
2. [330 Downloads]  Global Tax Wars in the Digital Era, by Assaf Harpaz (Georgia; Google Scholar) (reviewed by Mirit Eyal-Cohen (Alabama; Google Scholar) here)
3. [213 Downloads]  You Play, You Pay! Mobility, Territory, And Exclusive Source Taxation In The 21st Century: , by Yariv Brauner (Florida; Google Scholar)
4. [179 Downloads]  From Relic to Relevance, The Resurgence of Tariffs, by Reuven Avi-Yonah (Michigan; Google Scholar), Doron Narotzki (Akron; Google Scholar) & Tamir Shanan College of Management): 
5. [169 Downloads]  Formalism, Functionalism, and Nonfunctionalism in the Constitutional Law of Tax, by Daniel Hemel (NYU; Google Scholar) (reviewed by Adam Kern (San Diego; 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.

This Week's Ten Most Popular TaxProf Blog Posts

Legal Education: 

1. U.S. News, 2025-26 Law School Peer Reputation Rankings (And Overall Rankings)
2. Donald Tobin (Maryland), XPT Top 25 Law School Rankings (Alpha Phase)
3. Paul Caron (Dean, Pepperdine), More Commentary On The 2025-26 U.S. News Law School Rankings
4. U.S. News, 2025-26 Law Specialty Rankings
   
   1. Business Law
   2. Clinical Training
   3. Tax Law
5. Wall Street Journal, Students At Elite Law Schools Rebel Against Big Law Firms That Capitulated To Trump
6. Andrew Blair-Stanek (Maryland), LLMs Provide Unstable Answers To Legal Questions
7. Reuters, Texas Supreme Court May No Longer Require Graduation From ABA-Accredited Law School To Practice Law In The State
8. Jeffrey Bellin (William & Mary), The High Cost Of Law School Casebooks
9. Donald Tobin (Maryland), Building A Better Law School Rankings Mousetrap
10. Law360, Chicago Law School Seeks 7th Circuit En Banc Rehearing Of Tenured Professor's Retaliation Lawsuit

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

Tax:

1. U.S. News, 2025-26 Tax Law Rankings
2. Bryan Camp (Texas Tech), Lesson From The Tax Court: A Captivating Lesson On Insurance
3. Talking Points Memo, DOGE To Shutter DOJ Tax Division
4. Bloomberg Law, 11th Circuit Poised To Uphold Constitutionality Of Tax Court Despite President's Ability To Fire Judges Only For Cause
5. Florida Tax Review, New Issue
6. Adam Kern (San Diego), Review Of The Constitutional Law Of Tax By Daniel Hemel (NYU)
7. Tax Prof Move, Sarah Lawsky Leaves Northwestern For Illinois
8. Brian Galle (Georgetown), Presentation Of How To Tax The Rich: Options For 2025 And Beyond At Toronto
9. Lori Stuntz (IRS), Presentation Of Using A Gravity Model To Predict Cross-Border Tax Avoidance At Georgetown
10. Donald Tobin (Maryland), DOGE And Conservatives Can’t Really Want To Shutter DOJ Tax

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

Faith:

1. Vanity Fair (Zoe Bernard), Christianity Was ‘Borderline Illegal” In Silicon Valley. Now It’s The New Religion
2. Dispatch Faith (Paul Miller (Georgetown)), A Confessing Church for America’s Weimar Moment
3. New York Times (Liam Stack), Yeshiva University Agrees To Recognize LGBTQ Student Group After Five-Year Battle
4. New York Times (Ross Douthat), Can The Jesus Of History Support The Christ Of Faith?
5. BYU Law Review (Jennifer Lee Koh (Pepperdine)), Christian Lawyers In The Public Interest And Outside The Political Right
   Wall Street Journal (Jennifer Frey (Dean, Tulsa)), Flannery O’Connor’s Tales Of Evil And Grace

Editor's Note:  If you would like to receive a weekly email each Sunday with links to faith posts on TaxProf Blog, email me here. 

Good Governance Is Taxing: The Implications Of Tax Policy For Separation Of Powers And The Major Questions Doctrine

Samantha Strimling (J.D. 2024, Harvard), Note, Good Governance Is Taxing: The Implications of Tax Policy for Separation of Powers and the Major Questions Doctrine, 61 Harv. J. on Legis. 421 (2024): 

Among the significant developments of the Roberts Court so far has been the announcement of the major questions doctrine, which conditions “major” agency action on a clear statement from Congress. Much of the commentary on the doctrine has framed it as a tool for reprimanding perceived agency overreach. This Note challenges that framing by focusing on tax policy, an area of governance in which several broad assertions of agency power have not been challenged by courts on separation of powers grounds. This Note argues that this phenomenon is due to Congress’s own engagement in the realm of tax policy. First, Congress takes note of agency action and acts correctively where it disagrees. 

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Winners Of The 2025 National Tax Moot Court Competition

Florida Bar, Stetson Captures Tax Section’s 2025 National Tax Moot Court Crown:

After three days of competition featuring teams from law schools across the nation, Stetson University College of Law emerged as the overall champion in the Tax Section’s 2025 National Tax Moot Court Competition, sweeping the event with top honors in Best Oral Argument, Best Brief, and Best Oralist Final Round. ...

Stetson Law Moot Court team members Mia Bartolomei-Negron and Eddie Hong with Stetson Law Associate Professor Andrew Appleby. Bartolomei-Negron and Hong took top honors in the Tax Section’s 2025 National Tax Moot Court Competition, winning Best Oral Argument, Best Brief, and Best Oralist Final Round (tied).

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Maynard & Wallace: Penalizing Precarity

Goldburn P. Maynard Jr. (Indiana-Kelley, moving to Connecticut; Google Scholar) & Clinton Wallace (South Carolina; Google Scholar), Penalizing Precarity, 123 Mich. L. Rev. 423 (2025):

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

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Tax Policy In The Trump Administration

• Bloomberg, 'America Last' Corporate Tax Policies Can End With This Congress
• Bloomberg, Big 4 Accounting Firms Ramp Up AI for Tax Prep in Bet on the Future
• Bloomberg, House Passes Plan to Advance Trump Tax Cuts, Debt Limit Boost
• Bloomberg, Millionaire Tax Hike Divides Republicans in Trump Cut Debate
• Bloomberg, States Weigh NIL Tax Breaks to Attract Top College Athletes
• Bloomberg, Trump Has Legitimate Grievance With Digital Levies, Tax Pros Say
• Center on Budget and Policy Priorities, The 2017 Tax Law Did Not Boost the Economy
• Center for Economic and Policy Research, Donald Trump’s Big Wealth Tax

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Next Week’s Tax Workshops

Monday, April 14: Richard Winchester (Brooklyn) will present A Tax Policing Paradox as part of the Columbia Davis Polk & Wardwell Tax Policy Colloquium. If you would like to attend, please contact Michael Love.

Wednesday, April 16: Conor Clarke (Washington University; Google Scholar) will present Apportioned Direct Taxes (with Ari Glogower (Northwestern; Google Scholar)) as part of the Missouri Tax Policy Colloquium. If you would like to attend, please contact David Gamage. 

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Tobin: DOGE And Conservatives Can’t Really Want To Shutter DOJ Tax

Following up on Wednesday's post, DOGE To Shutter DOJ Tax Division:  Donald Tobin (Maryland; Google Scholar), DOGE and Conservatives Can’t Really Want to Shutter DOJ Tax:

As a former attorney in the Appellate Section of the Tax Division at DOJ, I am concerned about proposals being floated at DOJ to reassign Tax Division attorneys to U.S. Attorney’s offices. This move is contrary to the Administration’s efficiency and cost savings goals as well as its aim to ensure tax enforcement is not abused.

Some readers may not understand how cases end up in the Tax Division. Importantly, except in very limited cases (typically involving liens, levies, and bankruptcy (and a few other categories)), the Civil Trial and Appellate Sections of the Tax Division do not initiate any actions. In order for a civil case to be litigated by the Tax Division, either the case must have been litigated in Tax Court (or a federal trial court) and appealed to a Circuit Court, or the taxpayer has filed a suit in federal court against the United States seeking a tax refund. DOJ’s Tax Division generally acts as the lawyer for the government when taxpayers seek to litigate their right to a refund. This role will continue to be necessary and may overwhelm local U.S. Attorney offices, which typically have other priorities.

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Viswanathan Presents Damage Award Taxation And Distributive Justice Today At Duke

Manoj Viswanathan (UC Law-SF; Google Scholar) presents Damage Award Taxation And Distributive Justice, 109 Cornell L. Rev. __ (2025), at Duke today as part of its Tax Policy Seminar hosted by Larry Zelenak:

Damage awards are often intended to make plaintiffs whole, yet their tax treatment often undermines this goal. Plaintiffs frequently face unfavorable tax consequences that reduce the net value of their awards, leaving them worse off relative to the position they would have occupied absent the defendant’s wrongful conduct. Despite their significant impact, the tax costs of damage awards remain an overlooked issue in both legal scholarship and judicial decision-making. 

This Article makes several contributions to the discourse on damage award taxation. First, it develops a novel taxonomy of unfavorable tax consequences, systematically categorizing the ways in which tax liabilities can undermine “make whole” remedies. While prior scholarship has primarily focused on the effects of progressive taxation in employment discrimination claims, this Article demonstrates that unfavorable tax consequences affect a much broader range of legal claims.

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Thimmesch Reviews Valuing Social Data By Parsons & Viljoen

Adam Thimmesch (Nebraska; Google Scholar), Data, Value, and Power in the Digital Age (JOTWELL) (reviewing Amanda Parsons (Colorado; Google Scholar) & Salomé Viljoen (Michigan; Google Scholar), Valuing Social Data, 124 Colum. L. Rev. 993 (2024)):

The immense wealth being accumulated by U.S. technology companies and their owners has been apparent for some time, and events during and since the last presidential election have put this reality firmly in the spotlight. Wealth is power, and innovative data practices have allowed for a great concentration of that power among a few key companies and individuals. In Valuing Social Data, Amanda Parsons and Salomé Viljoen provide a timely analysis of this new market reality and help us to think about how our legal systems might better respond. Their article is timely and incredibly useful both for those new to thinking about the data economy and for those looking for new frameworks to address wealth and power disparities in modern society.

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Galler & Soled: Should PTIN Omissions Be Criminalized?

Linda Galler (Hofstra) & Jay A. Soled (Rutgers; Google Scholar), Should PTIN Omissions Be Criminalized?, 186 Tax Notes Fed. 1831 (Mar. 10, 2025):

On January 30 Senate Finance Committee Chair Mike Crapo, R-Idaho, and ranking member Ron Wyden, D-Ore., released a discussion draft of bipartisan legislation pertaining to IRS procedure and administration. Several provisions are designed to protect the public and fisc from unscrupulous tax return preparers. For example, the draft prescribes minimum requirements for obtaining a preparer tax identification number, which preparers are required to include on tax returns and claims for refunds that they prepare. The draft provides for healthy increases in the dollar amounts of civil penalties that can be imposed for various failings by return preparers, including the penalty for omitting a PTIN from a tax return or claim for refund.

To deter “ghost preparers” — persons who prepare but do not sign returns or otherwise comply with PTIN obligations — the draft proposes the criminalization of failure to comply with PTIN requirements. The proposed legislation would make it a felony to willfully (1) fail to furnish a PTIN, (2) furnish an invalid PTIN, or (3) furnish a PTIN assigned to another person. Those charged could face two years in prison, a fine of up to $50,000 ($100,000 for a corporation), or both.

We have argued elsewhere that the IRS should use artificial intelligence to identify return preparers who are derelict in their professional duties and to hold such individuals accountable for their misdeeds [AI and the Regulation of Tax Return Preparers, 28 Fla. Tax Rev. 1 (2024)]. AI’s ability to detect patterns and anomalies should enable the IRS to find many more ghost preparers than it has in the past.

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Sarin Presents Broken Budgeting Today At UC Law-SF

Natasha Sarin (Yale; Google Scholar) presents Broken Budgeting (with Safia Sayed (J.D. 2025, Yale)) at UC Law-SF today as part of its Tax Policy Colloquium hosted by Manoj Viswanathan:

As peacetime deficits rose over the course of the last half century, policymakers searched for tools to assess how close—or far off new budget, tax, and spending proposals would bring them to fiscal sustainability. This search led to the birth of modern scorekeeping, a complex and highly technical exercise undertaken by neutral government analysts known as scorekeepers. Because its origins are tied to rising deficits, scorekeepers are governed by rules that focus their attention on myopic cost/benefit analysis, rather than long-term policy evaluation. Over the years, many have criticized the process and questioned the accuracy of scores in particular arenas.

This Article offers a more provocative and fulsome take. While ostensibly neutral, the primacy of scorekeeping and scorekeepers has created impediments to legislating a progressive vision of government. Progressive policymaking has at its core government interventions that give society the ability to reap benefits down the line—like investments in children, or in combatting climate change—benefits that accrue in the long-term and are difficult to quantify.

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Kern Presents The Hole In The Global Minimum Tax Today At Missouri

Adam Kern (San Diego; Google Scholar) presents The Hole in the Global Minimum Tax at Missouri today as part of its Tax Policy Colloquium hosted by David Gamage:

This Article shows that the global minimum tax might make tax competition more intense. While the global minimum tax restricts competition for profit, it amplifies competition for investment. This Article provides the first analysis of that trade-off, suggesting surprising reforms to the global minimum tax and illuminating broader issues in tax policy and legal theory.

Conclusion
The global minimum tax is an ambitious effort to regulate international tax competition. Most tax scholars acknowledge that its carve-out for routine profit limits what it can achieve. Yet they remain optimistic: They believe that the global minimum tax will meaningfully restrict profit-shifting while leaving competition for investment, at worst, unaffected. On this view, even an imperfect reform represents progress.

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DOGE To Shutter DOJ Tax Division

Talking Points Memo, DOGE to Shutter DOJ Tax Division:

We know that DOGE is in the process of gutting the IRS. ... But it doesn’t stop at the IRS. DOGE is also in the process of essentially closing down the Tax Division at the Department of Justice.

Since the Tax Division is a statutory creation, it can’t literally be shuttered. As DOGE has done at numerous other offices and agencies, the entity is kept notionally alive in a zombie state of suspended animation: a few employees, a desk lamp and a couple workstations. That’s the legal fig leaf that allows the White House, with a compliant judiciary, to say that it hasn’t violated any congressional statute or terminated one of Congress’ creations. It’s simply choosing a new strategy of enforcement.

What they plan to do is essentially “reform” and “reorganize” the Tax Division out of existence. The plan is to dramatically reduce the number of Tax Division staff attorneys and then take the great majority of those that remain and disperse them out to the country’s 93 U.S. attorneys’ offices. Only a small managerial layer is to be left working from Washington, DC. ...

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Suarez Presents Discussion On The GAAR Today At Toronto

Steve Suarez (Borden Ladner Gervais LLP) presents a Submission to Deputy Prime Minister Chrystia Freeland Regarding Post-Budget Comments on the General Anti-Avoidance Rule (GAAR) at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series hosted by Ben Alarie:

The Canadian Chamber of Commerce is pleased to share post-budget comments on the general anti-avoidance rule (GAAR). Written by Steve Suarez, co-chair of the Canadian Chamber’s Economics and Taxation Committee and a partner in the Toronto office of Borden Ladner Gervais LLP, our submission:

• Proposes steps to achieve the GAAR that Parliament wants, which would produce “’reasonably predictable result[s]’ so that taxpayers can comply with the rule, and the administration and the courts can easily apply it”.
• Highlights the practical reality that virtually any commercial transaction done in something other than the least tax-efficient manner possible will come within the definition of GAAR, which contravenes Parliament’s original intention.
• Discusses suggestions for better targeting GAAR on those cases of abusive tax avoidance which GAAR is meant to address while minimizing the potential for administrative over-reach, reducing the number of GAAR disputes before the courts, and minimizing the cost and complexity of resolving those that remain.

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2025-26 U.S. News Tax Rankings

The new 2025-26 U.S. News Tax Rankings include the tax programs at 195 law schools (the faculty survey had a 49% response rate). Here are the Top 50:

Rank	School
1	NYU
2	Florida
3	Georgetown
3	Northwestern
5	Virginia
6	Chicago
6	Michigan
8	Columbia
8	UC-Irvine
10	Duke
10	UCLA
12	Boston College
12	Harvard
12	Texas
15	Boston University
15	USC
15	Yale
18	Loyola-L.A.
18	North Carolina
18	San Diego
18	Stanford
22	Penn
23	Fordham
23	George Washington
23	Pepperdine
26	Indiana (Maurer)
26	Minnesota
26	UC-Davis
29	Temple
29	UC Law - SF
31	Alabama
31	Cornell
31	Miami
31	UC-Berkeley
35	Arizona State
35	Florida State
35	Ohio State
35	Pittsburgh
35	Villanova
35	Washington Univ.
41	American
41	BYU
41	Cardozo
41	Emory
41	Georgia
41	Houston
41	Notre Dame
41	University of Washington
41	Wisconsin
50	Brooklyn
50	South Carolina
50	Vanderbilt

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

• 14: Ohio State (#35)
• 13: American (#41)
• 9: Miami (#31)
• 8: Emory (#41), Notre Dame (#41)
• 5: George Washington (#23), Pepperdine (#23), Alabama (#31), Arizona State (#35), Pittsburgh (#35)

Here are the biggest downward moves:

• -11: UC-Berkeley (#31) 
• -10: Vanderbilt (#50) 
• -9: Houston (#41)
• -7: Florida State (#35) 
• -5: Loyola-L.A. (#18), Georgia (#41), University of Washington (#41)

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

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Noah Marks Joins North Carolina Tax Faculty

Noah Marks, Visiting Assistant Professor at Duke, will join the North Carolina faculty on July 1, 2025:

Noah Marks is a tax scholar whose research examines how taxpayers and practitioners bridge the gap between the words of the Internal Revenue Code and the Treasury Regulations, on the one hand, and their transactions and situations, on the other hand. In particular, he examines various administrative materials created by the IRS that, despite not being formal law, assign meaning to codified tax law, and he investigates the impact of various judge-made doctrines that apply alongside codified tax law. His current research includes investigating the prevalence and impact of lingering proposed tax regulations and illuminating the development and contours of the abandonment doctrine. His work has appeared in the Boston College Law Review [Winning by Losing: The Strategy of Adverse Letter Rulings (reviewed here)], the Lewis & Clark Law Review [The Implied Assertion Doctrine Applied to Legislative History], the Journal of the American Taxation Association [Book Review:  Partnership Income Taxation (7th Ed. 2023))], and the Harvard Law & Policy Review [Least Restrictive Means: Burwell v. Hobby Lobby]

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Stuntz Presents Using A Gravity Model To Predict Cross-Border Tax Avoidance Today At Georgetown

Lori Stuntz (IRS) presents Using a Gravity Model to Predict Cross-Border Tax Avoidance (with Michael Udell (IRS, RAAS)) at Georgetown today as part of its Tax Law and Public Finance Workshop hosted by Brian Galle and Day Manoli:

International trade economists use gravity models to explain cross-border flows of goods and services across features of the two countries that either encourage (mass, or size) or discourage (distance) these flows. We repurpose this concept to measure the attractiveness for cross-border tax avoidance.

Our approach recasts the gravity model mass concept as a composite measure that includes the withholding tax rate (WHT) on payments between countries, ownership requirements associated with each WHT, and capital gains taxes imposed by the destination country. The distance term becomes measures of tax administration transparency across the border (with less transparency increasing the attractiveness for crossborder tax avoidance) and an index that measures regulator quality in each country. Unlike the classical gravity equation, which is measured as the attraction across two masses, this repurposed gravity equation for tax avoidance is not limited to an attraction across a single border. Instead, we develop a framework to measure the attraction across multiple borders as a sequence. An important feature of our model is that the order of the countries in a sequence matters.

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Florida Tax Review Publishes New Issue

The Florida Tax Review has published Vol. 28, No. 1 (Fall 2024): 

• Linda Galler (Hofstra) & Jay A. Soled (Rutgers; Google Scholar), AI and the Regulation of Tax Return Preparers, 28 Fla. Tax Rev. 1 (2024) 
• Levi Loveless (J.D. 2024, Houston), Capitalizing Carbon: The Taxation of Carbon Credits in Voluntary Carbon Markets, 28 Fla. Tax Rev. 51 (2024) 
• Orli Oren-Kolbinger (Oregon; Google Scholar), Do Tax Judges Favor the Tax Authority?, 28 Fla. Tax Rev. 91 (2024) 
• CJ Ryan (Indiana-Maurer; Google Scholar), Christopher Marsicano (Davidson; Google Scholar), Ann Bernhardt (Ph.D. Candidate, Texas A&M; Google Scholar) & Rylie Martin (Davidson; Google Scholar), Gaming the Endowment Tax, 28 Fla. Tax Rev. 128 (2024) 
• Daniel Schaffa (Richmond; Google Scholar), Towards an Understanding of Tax Complexity, 28 Fla. Tax Rev. 176 (2024) 

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16th International ATAX Tax Administration Conference: Getting It Right

The University of New South Wales hosts the 16th International ATAX Tax Administration Conference on April 8-10 (agenda): 

Tuesday, April 8 

Session 1 Plenary: Getting it Right: Leading Tax Administration 

• Michael Walpole (UNSW; Google Scholar) (chair) 
• Frederik Anseel (Dean, UNSW; Google Scholar) 
• Rob Heferen (Australian Taxation Office) 
• Peter Mersi (Inland Revenue New Zealand) 

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Moon Presents Manufacturing Investment And Employee Earnings Today At Columbia

Terry S. Moon (University of British Columbia; Google Scholar) presents Manufacturing Investment and Employee Earnings: Evidence from Accelerated Depreciation (with Yige Duan (Shanghai Jiao Tong University; Google Scholar)) at Columbia today as part of its Davis Polk & Wardwell Tax Policy Colloquium hosted by Michael Love:

This paper assesses the effects of a tax policy designed to induce manufacturing investment on employee earnings. Following the accelerated depreciation policy in Canada, which lowers the costs of acquiring machinery or equipment, treated firms increase manufacturing investment and employment. However, earnings of incumbent workers at treated firms decrease on average, primarily driven by displaced or low fixed effects workers. Furthermore, both the skill ratio and skill premium increase within firm, providing evidence of skill-biased technological change. Our findings suggest that a tax policy promoting manufacturing investment may contribute to increases in wage inequality both within firm and across firms.

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Lesson From The Tax Court: A Captivating Lesson On Insurance

I still don’t carry dental insurance.  I have not found a plan where the numbers make sense.  The benefits are so limited that by the time I would need them I will have paid more in premiums than the benefits are worth.  The game is not worth the candle.  So I take the money I would otherwise spend on premiums and save it up.  In effect I self-insure.

Businesses face the same choice in managing their various risks.  For most risks they can pay a third party, an insurance company.  But for some risks businesses cannot find a third-party insurance company willing to cover the risks at an acceptable price.  The game is not worth the candle.  It could be because the risks are too specific or esoteric, like covering the risk of bird flu for your chicken farm.  Lesson From The Tax Court: Not Every Decision Comes With An Opinion, TaxProf Blog (November 15, 2021)(discussing unpublished order in Puglisi et al. v. Commissioner). Or the risks might be so massive and the pool so shallow that no third-party insurance company will write coverage.  Here’s a blog post on that.  For those types of risks, businesses must self-insure.

Businesses that need to self-insure can do so by creating a captive insurance company to manage risk.  It’s a “captive” company when the business seeking risk management basically owns it.  And if it’s small enough---e.g. “micro”---it can claim some pretty sweet tax benefits under §831, benefits that help small businesses deal with unusual risk situations, like that bird flu.

But to get those tax benefits, the captive entity must be in the business of insurance.  That's our lesson for today.  In Jones, et al. v. Commissioner, T.C. Memo. 2025-25 (March 25, 2025), Judge Nega writes a really informative (and loooong) opinion about what that means. 

For the short lesson, see below the fold.

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Sarah Lawsky Leaves Northwestern For Illinois

Sarah Lawsky, Howard Friedman '64 JD Professor of Law and Data Analytics Advisor at Northwestern, will join the tenured faculty at Illinois as the L.B. Lall and Sumitra Devi Lall Professor of Law in Fall 2025. Sarah received Northwestern University's Martin E. and Gertrude G. Walder Award for Research Excellence in 2024:

The award recognizes Lawsky’s international impact at the intersection of law, artificial intelligence and real-world policy questions of government revenue and equity. Lawsky’s research focuses on tax law and on the application of formal logic and artificial intelligence to the law. She has taught courses related to federal income tax, corporate tax, partnership tax, tax policy, tax deals and contracts.

"I am very grateful for this recognition,” Lawsky said. “Working at the intersection of law, computer science and philosophy right now is incredibly fun and exciting, especially collaborating with other researchers and seeing my theoretical work have practical payoff in the real world." ...

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