TaxProf Blog

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

Friday, May 24, 2019

Columbia Hosts Tax Workshop

Columbia (2017)Columbia Tax Workshop:

Brian Galle (Georgetown, Law), The Tax Exemption for Charitable Property: An Empirical Assessment
Discussant: François Gérard (Columbia, Economics)

Yehonatan Givati (Hebrew University, Law), Theories of Tax Deductions: Income Measurement Versus Efficiency
Discussant: Michael Doran (Virginia, Law)

Rebecca Kysar (Fordham, Law), Unraveling the Tax Treaty
Discussant: Mirit Eyal-Cohen (Alabama, Law)

Zach Liscow (Yale, Law), Toward Democratic Law and Economics: Moral Commitments & Inequality
Discussant: Jake Brooks (Georgetown, Law)

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May 24, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Fourth International Conference On Taxpayer Rights At Minnesota

International Conference

The National Taxpayer Advocate hosts the Fourth International Conference on Taxpayer Rights at Minnesota. U.S. Tax Prof speakers include:

  • Alice Abreu (Temple)
  • Les Book (Villanova)
  • Lilian Faulhaber (Georgetown)
  • Richard Greenstein (Temple)
  • Kristin Hickman (Minnesota)
  • Stephanie McMahon (Cincinnati)
  • Alan Rozenshtein (Minnesota)
  • Caleb Smith (Minnesota)
  • Dennis Ventry (UC-Davis)

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May 24, 2019 in Conferences, Tax | Permalink | Comments (0)

Lederman Presents The Fraud Triangle And Tax Evasion Today At The University Of Lisbon

Lederman (2018)Leandra Lederman (Indiana) presents The Fraud Triangle and Tax Evasion today at the University of Lisbon:

The “fraud triangle” is the preeminent framework for analyzing fraud in the accounting literature. It is a theory of why some people commit fraud, developed out of studies of individuals, including inmates convicted of criminal trust violations. The three components of the fraud triangle are generally considered to be (1) an incentive or pressure (usually financial), (2) opportunity, and (3) rationalization. There is a separate, extensive legal literature on tax compliance and evasion. Yet the fraud triangle is largely absent from this legal literature, although tax evasion is a type of fraud. This article rectifies that oversight, analyzing how the fraud triangle—and its expanded version, the “fraud diamond”—can inform the legal literature on tax compliance. The article argues that the fraud triangle can provide a frame that brings together distinct tax compliance theories discussed in the legal literature, the traditional economic (deterrence) model and behavioral theories focusing on such things as social norms or tax morale.

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May 24, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Thursday, May 23, 2019

Karen Brown Receives Bloomberg Lifetime Achievement Award For Distinguished Service In Tax

Brown

Professor Karen B. Brown Awarded 2018 Leonard L. Silverstein Award for Distinguished Service in Tax by Bloomberg Tax:

Bloomberg Tax announced the 2018 recipients for outstanding authorship in federal taxation and the Leonard L. Silverstein Award for Distinguished Service in TaxKaren B. Brown, Theodore Rinehart Professor of Business Law, was this year’s recipient of the Silverstein Award, named after the founder of the Tax Management Portfolios, for his long-standing contributions to the field of tax.

“One of the beautiful things about a lifetime achievement award is that it doesn't just recognize the achievements of the recipient, but it most especially acknowledges the contributions of all those, like Mr. Leonard Silverstein, who have gone before to blaze a path for us to follow,” said Professor Brown. “The Leonard L. Silverstein Award for Distinguished Service in Tax is an enormous honor which I will always cherish. I am very proud to accept it and hope to continue to bring honor to Mr. Silverstein's legacy.”

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May 23, 2019 in Legal Education, Tax | Permalink | Comments (0)

IRS Releases 2018 Data Book

218 Data BookIR-2019-96, IRS Releases Data Book for 2018 (May 20, 2019):

The Internal Revenue Service today released the 2018 IRS Data Book, a snapshot of agency activities for the fiscal year.

The 2018 IRS Data Book describes activities conducted by the IRS from Oct. 1, 2017, to Sept. 30, 2018, and includes information about tax returns, refunds, examinations and appeals. The annual publication is illustrated with charts showing changes in IRS enforcement activities, taxpayer assistance levels, tax-exempt activities, legal support workload and IRS budget and workforce levels when compared to fiscal year 2017 and prior years. Included this year is a section on taxpayer attitudes from a long-running opinion survey.

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May 23, 2019 in IRS News, Tax | Permalink | Comments (0)

IDC Herzliya Hosts Conference Today On Taxation And Globalization

IDC Logo (2019)IDC Herzliya Harry Radzyner Law School hosts the Atara Kaufman Annual Conference on Law and Globalization today on Taxation and Globalization:  A Research Workshop:

Session I: International Tax Competition
Chair: Rifat Azam (IDC Herzliya)
Reuven Avi Yonah (Michigan), Globalization, Tax Competition and the Fiscal Crisis of the Welfare State: A Twentieth Anniversary Retrospective
Tsilly Dagan (Bar Ilan), International Tax Policy: Between Competition and Cooperation

Session II: Taxation of Multinationals
Chair: David Elkins (Netanya)
Joseph Bankman (Stanford), Collecting the Rent: The Global Battle to Capture MNE Profits, 72 Tax L. Rev. ___ (2019) (with Mitchell Kane (NYU) & Alan Sykes (Stanford)) (reviewed by David Elkins (Netanya) here)
Yoram Margalioth (Tel Aviv), Global Collective Action

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May 23, 2019 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Joint Committee On Taxation: Overview Of The Tax Gap

Joint Tax CommitteeFollowing up on my previous post, House Holds Hearing Today On The Tax Gap:  the Joint Committee on Taxation has released Overview Of The Tax Gap (JCX-19-19) (May 08, 2019):

This document ... provides a standard definition of the tax gap, a description of issues relevant to measurement of the tax gap, and a discussion of taxpayer behavioral responses and the effectiveness of measures to increase compliance.  ...

A standard definition of the tax gap is the shortfall between the amount of tax voluntarily and timely paid by taxpayers and the actual tax liability of taxpayers. It measures taxpayers’ failure to accurately report their full tax liabilities on tax returns (i.e., underreporting), pay taxes due from filed returns (i.e., underpayment), or file a required tax return altogether or on time (i.e., non-filing). Estimates of the tax gap provide a picture of the level of overall noncompliance by taxpayers for a particular tax year, and include shortfalls in individual income taxes, corporate income taxes, employment taxes, estate taxes, and excise taxes. The individual behavioral responses to taxation that result in the tax gap raise a set of important policy questions, such as the optimal level of resources to devote to tax administration and the manner in which those resources are best deployed.  

The Internal Revenue Service (“IRS”) periodically conducts studies to estimate the size of the tax gap and analyze its components. Table 1 indicates that in the most recent study, the estimated annual gross tax gap, per year on average for tax years 2008-10, was $458 billion and the annual net tax gap, which is the gross tax gap adjusted for late payments and collections due to enforcement activities, was $406 billion. Adjusted for inflation, the gross and net tax gaps are $504 billion and $447 billion in 2016 dollars, respectively.  With total average tax liabilities of $2.5 trillion per year between 2008 and 2010, the voluntary compliance rate is 81.7 percent and the net compliance rate is 83.7 percent.

Tax Gap 1

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May 23, 2019 in Congressional News, Gov't Reports, Tax | Permalink | Comments (0)

Wednesday, May 22, 2019

NY Times: IRS Memo Undercuts Mnuchin On Withholding Trump’s Tax Returns

New York Times, I.R.S. Memo Undercuts Mnuchin on Withholding Trump’s Tax Returns:

The Internal Revenue Service has no choice but to honor congressional requests for President Trump’s tax returns unless he invokes executive privilege to protect them, according to a draft legal memo written by agency staff members.

The memo appears to undercut the reasoning offered by Treasury Secretary Steven Mnuchin, who has refused to comply with Democrats’ requests because they lack a “legitimate legislative purpose.” Mr. Mnuchin said he made his decision after consulting with lawyers from the Treasury Department, the I.R.S. and the Justice Department.

But the I.R.S. memo says the Treasury secretary does not have the authority to deny tax-writing committees’ requests for taxpayer returns.

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May 22, 2019 in Tax | Permalink | Comments (0)

IRS Office Of Chief Counsel Seeks To Hire JDs/Tax LLMs For Summer Honors And Legal Programs

IRS Office of Chief Counsel Logo (2015)Michael J. Desmond (IRS Chief Counsel), IRS Office of Chief Counsel Summer Honors Program and Summer Legal Programs:

After many years of attrition, the IRS Office of Chief Counsel is turning a corner this year and looking to recruit law students and lawyers from a diverse group of well qualified candidates. The Office of Chief Counsel has always offered unparalleled opportunities for professional advancement. With implementation of the most comprehensive tax reform law in a generation under way, working with the Chief Counsel’ Office is a truly unique opportunity to participate in the development of entirely new provisions of tax law, both in technical positions drafting guidance and providing advice and in trial attorney positions handling cases in Tax Court.

We generally accepts applications as early as summer 2019 for Honors Program positions beginning fall 2020 and Summer Legal Program positions for summer 2020. This year, applicants can begin applying to our Honors Program beginning May 20, 2019, and have until September 30, 2019, to submit application materials. Although the final deadline to apply is September 30th, both the Honors Program and Summer Legal Program announcements have two earlier application cutoff dates, July 31st and September 3rd. Applicants who apply by the earlier deadlines will be considered and likely receive offers before the final deadline, so please encourage interested applicants to apply as soon as possible.

Here is some key information about the Honors Program and Summer Legal Program, along with application links that law students and recent graduates can use to apply. The application links provide job descriptions, cities where we’re hiring, and eligibility and hiring criteria information.

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May 22, 2019 in IRS News, Tax | Permalink | Comments (0)

Tax Papers At Today's Junior Faculty Forum At Richmond

Richmond (2018)Tax presentations at today's Junior Faculty Forum at Richmond:

Hayes Holderness (Richmond), Legislative Evasion through Tax:

Approximately 20 states impose specific excise taxes on the possession or sale of controlled substances (i.e., illegal drugs). Often these taxes take the form of stamp taxes, requiring the taxpayer to purchase and affix stamps to the controlled substances in his or her possession. These taxes are rarely, if ever, enforced or complied with before the taxpayer is charged in the criminal justice system for the possession of the controlled substance. Once a taxpayer is brought into the criminal justice system, the state taxing authority is alerted and an assessment for the controlled substance tax is issued.

Courts and commentators have addressed the major criminal law issues associated with the taxes—namely concerns about double jeopardy and self-incrimination. From a tax perspective, the taxes might not appear particularly problematic; they merely function as Pigouvian taxes on the possession or sale of controlled substances. However, because these taxes are imposed on activities already sanctioned through another area of law and because enforcement of the taxes relies on non-tax actors, concerns arise about the incidence and administration of the taxes. These concerns call in to question the effectiveness of controlled substances taxes and suggest that the taxes serve as low-salience vehicles for legislators to achieve non-tax policy results.

Daniel Schaffa (Richmond), Valuable Realizations (with James R. Hines Jr. (Michigan)):

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May 22, 2019 in Conferences, Scholarship, Tax | Permalink | Comments (0)

University Of Luxembourg Hosts Seminar Today On International Tax Developments: Cross-Atlantic Perspectives

LuxThe University of Luxembourg hosts a seminar today on International Tax Developments: Cross-Atlantic Perspectives:

  • Yariv Brauner (Florida), The Digital Tax Future in the U.S. and the EU
  • Leandra Lederman (Indiana), Tax Rulings and Transparency: "Taxpayers sometimes seek advance tax rulings to obtain certainty regarding the tax treatment of planned transactions. The transparency of these rulings, including Advance Pricing Agreements regarding intra-company transfer pricing, has changed significantly in the past several years. One of the triggers for change was the 2014 “LuxLeaks” scandal, revealing what the press sometimes termed “secret tax deals” between the Luxembourg tax authority and multinational companies. Since then, legal changes require tax authorities to share cross-border advance rulings with other countries’ tax authorities. In addition, Luxembourg has formalized and modified its rulings practice. This paper examines what these legal changes have meant for Luxembourg and the United States, and whether the current level of rulings transparency is appropriate and sufficient."

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May 22, 2019 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Call For Papers: National Tax Association

NTA TampaDear tax colleagues,

You are invited to submit a paper, extended abstract, or complete session to the National Tax Association annual conference, which will be held in Tampa, November 21-23, 2019.  NTA has extended the submission deadline to June 8.

The official NTA call for papers is copied below.  This year, law professors will submit to specific subject areas, instead of submitting to a general “Law/Practitioner” area.  The subject areas include: (1) Accounting; (2) Administration and Compliance; (3) Corporate Tax; (4) Developing World; (5) International Tax; (6) Behavioral Public Finance; (7) Charity/Public Goods; (8) Environmental/ Energy; (9) Education; (10) Health; (11) Personal Tax/Labor; (12) Macro and Fiscal Policy; (13) Political Economy; (14) Retirement/SSA; (15) State/Local Public Finance; and (16) Transfers/Welfare State. 

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May 22, 2019 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Tuesday, May 21, 2019

Elizabeth Warren's 7% Real Corporate Profits Tax Would Politicize GAAP, Harm Investors And Employees

Warren 2020Wall Street Journal op-ed:  Don’t Let Warren Politicize Accounting, by Scott Dyreng (Duke):

Sen. Elizabeth Warren is campaigning for president like Robin Hood in the Hamptons. But the Massachusetts Democrat’s proposed Real Corporate Profits Tax—her plan to tax highly profitable companies on their financial accounting incomes—may do more harm than good to the working class she claims to champion.

The U.S., like other developed nations, uses two accounting systems. Companies report income to investors following Generally Accepted Accounting Principles, or GAAP, which are determined by the private, nonpolitical Financial Accounting Standards Board. The paramount purpose of this standard is to provide investors with information they can use to allocate capital soundly.

To file their taxes, companies follow different accounting rules, defined by the Internal Revenue Code. Congress has multiple goals in the way it defines the corporate tax, from raising revenue and redistributing wealth to regulating companies’ behavior and increasing U.S. competitiveness.

Ms. Warren calls for a 7% levy on financial-accounting earnings above $100 million, on top of the 21% tax corporations already pay on taxable income. Even putting aside its negative impact on profits, the new tax would hurt investors by subjecting accounting standards to politics.

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May 21, 2019 in Tax | Permalink | Comments (0)

Field: Tax Lawyers As Tax Insurance

Heather M. Field (UC-Hastings), Tax Lawyers as Tax Insurance, 60 Wm. & Mary L. Rev. ___ (2019):

Transactional tax lawyers, by rendering tax opinions, provide a version of insurance to clients. This insurance is clearly incomplete, but by providing a tax opinion, a lawyer conditionally agrees to indemnify the client for at least part of the potential loss the client incurs if the favorable tax treatment described in the opinion is successfully challenged. Although insurance is not the primary function of transactional tax lawyers, and although this Article does not argue that tax opinions should be regulated as insurance, indemnification — a key element of insurance — is an important part of the economic relationship between a client and a lawyer who provides a tax opinion. Surprisingly, this insurance-like function has been largely overlooked in the literature. Thus, by identifying and exploring the insurance-like aspect of the transactional tax lawyer’s role, this Article fills a gap in the literature and offers a new framework for understanding the value of tax lawyers.

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May 21, 2019 in Scholarship, Tax | Permalink | Comments (1)

AALS Tax Section Call For Papers: New Voices In Tax Law & Policy

AALS (2018)The AALS Section on Taxation is pleased to announce the following Call for Papers. Selected papers will be presented at a works-in-progress session at the 2020 AALS Annual Meeting in Washington, D.C. The works-in-progress session is tentatively scheduled for Friday, January 3, 2020. This program will provide speakers the opportunity to present their work and receive feedback from commentators in the field.

Eligibility: Scholars teaching at AALS member schools or non-member fee-paid schools with seven or fewer years of full-time teaching experience as of the submission deadline are eligible to submit papers. For co-authored papers, all authors must satisfy the eligibility criteria.

Due date: 5 p.m. PDT, Thursday, August 15, 2019.

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May 21, 2019 in Conferences, Legal Education, Scholarship, Tax | Permalink | Comments (0)

Making Only America Great? Non-U.S. Market Reactions To U.S. Tax Reform

Fabio B. Gaertner (Wisconsin), Jeffrey L. Hoopes (North Carolina) & Area Braden Williams (Texas), Making Only America Great? Non-U.S. Market Reactions to U.S. Tax Reform:

We examine U.S. tax reform’s effect on foreign firms’ stock returns. Examining key tax reform events, we find little average foreign firm market reaction to tax reform. However, this average effect masks great heterogeneity by country, industry, and firm. Chinese firms experience large negative returns, especially steel manufacturers, while the rest of the world experiences positive returns. Firms in industries that export to the U.S. and firms in financial distress also experience larger negative returns. Overall, our results suggest that U.S. tax reform had varied, yet systematic effects on foreign firms’ shareholders’ wealth and the global competitive landscape.

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May 21, 2019 in Scholarship, Tax | Permalink | Comments (0)

Monday, May 20, 2019

Satterthwaite: Rewarding Honest Taxpayers — An Experimental Assessment

Florida Tax Review (2018)Emily Satterthwaite (Toronto), Rewarding Honest Taxpayers: An Experimental Assessment, 22 Fla. Tax Rev. 200 (2019):

Shrinking budgetary allocations for tax enforcement at the U.S. federal level have placed an unprecedented premium on low-cost policies that promote voluntary tax compliance. In other jurisdictions, tax administrators have experimented with rewarding taxpayers for voluntarily complying with tax laws, but there has been an absence of reward-focused policy experimentation in the United States. To explore the efficacy of rewards among U.S. taxpayer populations, a multi-period online tax reporting experiment was conducted featuring a simple reward intervention: a token monetary amount pre-announced and provided to participants who were audited and found to have fully complied. The reward failed to increase average post-audit compliance levels as compared to the no-reward control condition, regardless of whether random audits or non-random (i.e., conditional on past detected evasion) audits were used. However, the reward treatment condition in combination with random audits was strikingly effective with respect to an alternative measure of tax compliance: “consistent compliance,” or the outcome in which a participant voluntarily reports all of her income in each and every period of the experiment.

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May 20, 2019 in Scholarship, Tax | Permalink | Comments (0)

Morehouse College Commencement Speaker To Pay Student Loans Of Graduates ($40 Million) — Tax-Free

New York Times, Morehouse Graduates’ Student Loans to Be Paid Off by Billionaire:

The 396 young men began the day as students in caps and gowns, ready to graduate from Morehouse College — full of hope, but burdened in most cases with the debts that financed their education.

Then their commencement speaker went off-script with an extraordinary pledge: the newly minted alumni of the historically black college in Atlanta would go forth into the world student debt-free.

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May 20, 2019 in Tax | Permalink | Comments (2)

Children Of Deceased Soldiers, Low-Income College Students Are Taxed Like Trust-Fund Babies Under 2017 Tax Act

Wall Street Journal Tax Report, The Surprising Tax Bill for Sons and Daughters of Gold-Star Families:

The Kiddie Tax is a decades-old law meant to prevent the wealthy from shifting assets to children in order to take advantage of their lower income-tax rates.

But a revision to the tax in the big overhaul passed by Congress in 2017 is raising taxes on as many as 10,000 children of deceased service members who earn an average annual benefit of about $13,000, according to Department of Defense data provided by the Tragedy Assistance Program for Survivors, or TAPS. It’s a nonprofit group for families who have lost service members that’s working to change the law.

And the new rules reach well beyond military families. They can also raise taxes on children from lower-income families who receive income after a tragedy and pose a threat to millions of students receiving college financial aid.

Congress passed the Kiddie Tax in 1986. Until then a parent could, say, give a child appreciated stock and the child could sell it, pay tax at lower rates, and use the proceeds to pay for college tuition or a Corvette.

The 1986 provision levied the Kiddie Tax on a broad range of children’s “unearned” income above an exemption, which currently is $2,200. Above that amount, the children owed tax at the parents’ rate. The levy has never applied to a youngster’s earnings from being a camp counselor or designing websites.

Many features of the 1986 Kiddie Tax were complex, however. To simplify, the 2017 overhaul switched the Kiddie Tax rate from the parents’ rate to trust tax rates. These kick in at a very low level of taxable income: For 2019, the top rate of 37% takes effect at just $12,751.

Kiddie Tax

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May 20, 2019 in Legal Education, Tax | Permalink | Comments (0)

Lesson From The Tax Court: Mostly Dead Corporation Cannot File Petition

Tax Court (2017)As we learned from this scene in The Princess Bride, there’s dead...and then there’s mostly dead. 

In Timbron Holdings Corporation v. Commissioner, T.C. Memo. 2019-31 (April 8, 2019) (Judge Vasquez), the Tax Court decided that it could not hear the petition filed by a mostly dead corporation.  In reaching this conclusion, Judge Vasquez carefully followed existing Tax Court precedents to hold: (1) a corporation whose charter is suspended under California law (i.e. is mostly dead) has no capacity to file a Tax Court petition; (2) the corporation’s lack of capacity is not a defense that the government must raise but is instead an element of §6213’s jurisdictional requirements; and (3) “reliance on equity and policy considerations [cannot] overcome a jurisdictional defect.”

The idea that §6213 is a jurisdictional statute is an old idea.  Really old.  Decrepitly old.  If the right right case goes up on appeal, I think an appellate court will likely decide that old idea is dead.  Deceased.  Kaput.  Expired.  Gone.  Done in.  All-the-way dead.  Parrot dead.  To beat the dead horse, an appellate court is likely to find that §6213 is not a jurisdictional restriction on the Tax Court but is instead a “claims processing rule,” a term the Supreme Court uses to describe limitations that are important but not jurisdictional.  You can find the deathly dull details in my forthcoming article (Fall 2019 issue of The Tax Lawyer).

Timbron is not the right case to take on appeal.  I think the result would be the same even if §6213 were treated as a straight-forward non-jurisdictional limitations period.  But, either way, the result creates a curious contradiction in the Tax Court Rules.  Details below the fold.

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May 20, 2019 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure | Permalink | Comments (1)

Hemel: Steven Mnuchin’s Mysterious Argument That He Is 'Not Authorized' To Hand Over Trump’s Tax Returns

Daniel Hemel (Chicago), Steven Mnuchin’s Mysterious Argument:

Almost no one was surprised when Treasury Secretary Steven Mnuchin said today that he will not comply with the House Ways and Means Committee’s subpoena for President Trump’s tax filings. Mnuchin already had made clear that he believes he is under no obligation to hand over those documents to House members. But there was something puzzling about Mnuchin’s letter in response to the Ways and Means Committee’s subpoena — something that even Mnuchin’s defenders will have a difficult time justifying.

“In reliance on the advice of the Department of Justice, we have determined that the Committee’s request lacks a legitimate legislative purpose, and pursuant to section 6103, the Department is therefore not authorized to disclose the requested returns and return information,” Mnuchin wrote. The emphasis is mine, not Mnuchin’s. ...

Here’s why that’s puzzling.

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May 20, 2019 in Tax | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, May 19, 2019

Fifth Annual Texas Tax Faculty Workshop At Houston

Houston (2017)The University of Houston Law Center hosted the Fifth Annual Texas Tax Faculty Workshop (program) on Friday:

Johnny Buckles (Houston), Curbing (or not) Foreign Influence on United States Politics and Policies through the Federal Taxation of Charities
Commentator: Terri Helge (Texas A&M)

Cal Johnson (Texas), Pay Back of the 2017 Act — Deficits by Wealth
Commentator: Bret Wells (Houston)

Bryan Camp (Texas Tech), Taxation of Electronic Gaming
Commentator: Bruce McGovern (South Texas)

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May 19, 2019 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Repetti: Getting To The Bottom Of Trump's Tax Secret

The Hill op-ed:  Getting to the Bottom of Trump's Tax Secret, by James R. Repetti (Boston College):

Recent revelations in the New York Times about President Trump’s $1.17 billion tax losses during the period from 1985-1994 have revived demands that he release his tax returns.

Moreover, many have discredited the attempt of his advisors to attribute the losses to generous depreciation deductions. His losses of $1.17 billion were far too large to be attributable merely to tax depreciation deductions.

Rather, a significant portion of his losses likely were operating losses. Indeed, Trump has hinted publically at least once that he struggled financially during this time period.

But lurking behind the veil of secrecy created by Trump’s failure to disclose his returns lurks another, more troubling, secret. Because of tax law nuances, it is possible that either Trump’s losses were significantly higher than the reported $1.17 billion (approximately $2 billion during that period) or, alternatively, that Trump was insolvent. ...

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May 19, 2019 in Tax | Permalink | Comments (1)

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. [430 Downloads]  Taxing the Digital Economy Post BEPS ... Seriously, by Andrés Báez (Universidad Carlos III de Madrid) & Yariv Brauner (Florida)
  2. [398 Downloads]  Residual Profit Allocation by Income, by Michael Devereux (Oxford), Alan Auerbach (UC-Berkeley), Michael Keen (IMF), Paul Oosterhuis (Skadden), Wolfgang Schön (Max Planck) & John Vella (Oxford) (reviewed by Christine Kim (Utah) here)
  3. [170 Downloads]  Fixing Philanthropy: A Vision for Charitable Giving and Reform, by Roger Colinvaux (Catholic)
  4. [117 Downloads]  Critical Tax Thinking, by Edward Kleinbard (USC)
  5. [112 Downloads]  The Digital Services Tax as a Tax on Location-Specific Rent, by Wei Cui (British Columbia) & Nigar Hashimzade (Durham University) reviewed by Kim Brooks (Schulich School of Law, Dalhousie University) here)

May 19, 2019 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, May 18, 2019

This Week's Ten Most Popular TaxProf Blog Posts

Tokic: Taxing Greed

Genevieve Tokic (Northern Illinois), Taxing Greed, 50 Loy. L.A. L. Rev. 607 (2017):

Appeals to greed in support of various tax proposals are often seen in response to populist moods in politics. Such appeals may be used to garner political support for a policy or proposal. However, there has been little academic consideration of the role of greed (or attitudes towards greed) in the law, and in tax law in particular. This Article seeks to fill that gap by taking a close look at the concept of greed. In doing so, the Article first surveys the history of greed and its meaning, and draws on political philosophy and economic literature to provide a working definition of greed. The Article then investigates the role of greed in tax law, focusing on the issue of executive compensation, in order to consider whether “greed” is merely political rhetoric, or if it can provide a framework or analytical tool that is useful for crafting tax rules aimed at correcting or remedying excess. The Article ultimately concludes that, while “greed” is indeed a powerful rhetorical tool, its application in tax law and policy should be limited to situations where greed manifests as the appropriation of money, wealth or goods for personal gain, accompanied by illegality, a breach of fiduciary duty or contract, or indicators of market failure or manipulation. In such scenarios, carefully considering the meaning of greed and thinking about our reactions to it in crafting tax law and policy may help tailor rules to target the negative aspects of the behavior in question.

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May 18, 2019 in Scholarship, Tax | Permalink | Comments (0)

Friday, May 17, 2019

Weekly SSRN Tax Article Review And Roundup: Kim Reviews Cui's The Digital Services Tax: A Conceptual Defense

This week, Young Ran (Christine) Kim (Utah) reviews a new work by Wei Cui (UBC), The Digital Services Tax: A Conceptual Defense (April 2019).

KimThere are already multiple versions of a real digital services tax (DST) that have been implemented or proposed in multiple countries. France released a bill introducing a DST retroactively to January 1, 2019, UK will introduce a DST in April 2020, and other European countries, such as Spain, Austria, and Italy, are discussing or have proposed a bill mimicking the March 2018 DST proposal from the European Council. While details of the proposed DSTs vary, in general, a DST is a 2-3% tax imposed on the gross revenues of specific digital business models where revenues are linked to the participation of users in the country exercising such taxing right. It also establishes a specified revenue threshold which triggers the DST. The goal of the DST is to capture profits earned by multinationals that reflect value contributed by users of such digital business.  

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May 17, 2019 in Christine Kim, Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Tax Policy In The Trump Administration

More Commentary On Trump's Taxes And Tax Returns

The Top 10 Cities For Accountants

AccountingWEB, The 10 Best Cities for Accountants:

Sometimes, the grass really is greener elsewhere. LedgerLink, a social and career community for accounting professionals, recently conducted extensive surveys and analysis to determine the very best American cities for accountants, including a calculation of average salaries. They took into account the competitiveness of the accountant market, the availability of accounting jobs, and even lifestyle elements like average commuting time.

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May 17, 2019 in Tax | Permalink | Comments (1)

Estate Planning Considerations For Sports Team Owners

Duncan Ternus (J.D. 2020, Texas Tech), Winning Starts at the Top: Estate Planning Considerations for the Modern Day Sports Team Owner:

Professional sports team owners need to carefully plan their estates in order to win on and off the field. These individuals are arguably the most important figures in a professional sports team because their actions affect everyone associated with the team, from players to fans. Team owners represent some of the wealthiest people in America and have large estates that often include other business ventures besides their sports teams. When team owners take inadequate estate planning steps, their estates are often forced to sell their teams in order to pay estate taxes. This in turn can lead to team instability or, worst case scenario from a fan’s perspective, a forced relocation of the team.

This comment examines some of the ways today’s professional sports team owners can plan their estates in order to not only continue their personal success but their team’s success as well. Federal estate taxes are the largest hurdle for team owners because the tax affects only the wealthiest of estates, and planning one’s estate to avoid these estate taxes is vital for a team owners’ success. The future of the federal estate tax remains to be seen under the Trump administration, which could lead to substantial gain for team owners should the tax be repealed altogether. Team owners also need to consider state estate taxes for the states in which they are domiciled.

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May 17, 2019 in Scholarship, Tax | Permalink | Comments (1)

Thursday, May 16, 2019

Shurtz: Long Term Care And the Tax Code: A Feminist Perspective On Elder Care

Nancy E, Shurtz (Temple), Long-term Care and the Tax Code: A Feminist Perspective on Elder Care, 20 Geo. J. Gender & L. 107 (2018):

Elder care is an increasingly important sector in the comprehensive health care matrix in the United States. It is a realm of particular import to women: women live longer, develop degenerative conditions at higher rates than men, and are more likely to receive and provide care. Women earn less income, possess less net wealth, and are far more likely to live in poverty. Public policies regarding elder care add to the increasing strain on women by systematically rejecting home-based caregiving labor as “legitimate” economic activity, rendering it unworthy of subsidized support. As a result, a secondary policy bias develops, favoring institutional (market) elder care over home-based options, which creates demonstrably poor health and life-quality results and adds substantial monetary costs to both affected individuals and taxpayers. This Article examines the state of elder care—especially in the long-term context—and its impact on the lives of women as both care recipients and caregivers.

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May 16, 2019 in Scholarship, Tax | Permalink | Comments (0)

TurboTax And H&R Block Saw Free Tax Filing As A Threat — And Gutted It

TurboTaxHRBlockProPublica, TurboTax and H&R Block Saw Free Tax Filing as a Threat — and Gutted It:

Despite signing a deal with the IRS that pledged they would help tens of millions of Americans file taxes for free, tax software giants Intuit, the maker of TurboTax, and H&R Block instead deliberately hid the free option and actively steered customers into paid products, according to an internal document and five current and former employees of the companies.

H&R Block explicitly instructs its customer service staff to push people away from its free offering, according to internal guidance obtained by ProPublica.

“Do not send clients to this Web Site unless they are specifically calling about the Free File program,” the guidance states, referring to the site with the company’s free option. “We want to send users to our paid products before the free product, if at all possible.”

Steering customers away from TurboTax’s truly free option is a “purposeful strategy,” said a former midlevel Intuit employee. For people who find TurboTax through a search engine or an online ad, “the landing page would direct you through a product flow that the company wanted to ensure would not make you aware of Free File.”

When the Free File program launched 16 years ago, it was extolled as the best sort of collaboration between government and private enterprise. With little cost to the IRS, the huge companies that dominate online tax preparation would help millions of Americans file their taxes for free. Intuit and the industry have spent millions lobbying to make the Free File program permanent because it contains a noncompete provision that restricts the IRS from creating its own free, online filing system.

But privately, the free filing option is seen for what it is: a threat to the companies’ profits.

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May 16, 2019 in Tax | Permalink | Comments (0)

Abreu: Tax 2018 — Requiem For Ability To Pay

Alice Abreu (Temple), Tax 2018: Requiem for Ability to Pay, 51 Loyola L.A. L. Rev. 61 (2018) (reviewed by Neal Buchanan (Florida) here):

Enactment of the TCJA was followed by a mad dash to understand its effects. The speed and process of enactment left no time for serious attempts to analyze whether the TCJA transforms the income tax system in any fundamental way. This Essay is a first step in that analysis. Although some of the most important changes I discuss are set to expire or phase out after 2025, understanding their policy implications is important, not only because they are the law now but also because Congress may extend them, perhaps indefinitely.

The TCJA has changed the way the tax system operationalizes the principles of horizontal equity and ability to pay, has brought the base of the regular tax closer to the base of the AMT, and has increased the number of tax provisions that have been promulgated in the form of standards, which will require the deployment of significant administrative and judicial resources before they can be implemented effectively. By removing consideration of taxpayers’ support obligations from the tax base (except as relevant to the determination of filing status in the case of taxpayers who might qualify for the statuses of head of household or surviving spouse), the TCJA has jettisoned the value of ability to pay. It has unmoored the tax base zero bracket from the poverty level and created a system in which two taxpayers with very different ability to pay as a result of support obligations will be taxed the same, and in which two taxpayers with the same ability to pay will be taxed differently. The TCJA has turned the concept of horizontal equity on its head. In some cases the tax base will even be the taxpayer’s gross income in its entirety, subjecting to taxation even the amount needed for minimal subsistence.

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May 16, 2019 in Scholarship, Tax | Permalink | Comments (1)

Death Of Ron Hjorth (University Of Washington)

Hjorth

Dear UW Law Community:
It is with great sadness that I announce the death of Dean Emeritus Roland L. Hjorth, the Garvey Schubert Barer Professor of Law, on Monday, May 6. He was 83.

While I only had the pleasure to meet with Ron a few times, I know he was a treasured colleague, mentor and friend. He was a visionary leader and legal scholar, as well as recognized expert in taxation, international law and litigation. His wisdom, legendary hospitality and kindness will be greatly missed.

A celebration of life service will be held at the law school later this summer, and more details will be shared as soon as they are available. In the meantime, please send condolences and correspondence to Ron’s daughter, Heather Hjorth, by email at heatherhjorth@gmail.com or by mail at 5636 NE Keswick Drive, Seattle, WA 98105-2856.

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May 16, 2019 in Legal Education, Obituaries, Tax | Permalink | Comments (1)

NY Times: Can The Racial Wealth Gap Be Closed Without Speaking Of Race?

New York Times op-ed:  Can the Racial Wealth Gap Be Closed Without Speaking of Race?, by Emily Badger:

Elizabeth Warren wants to offer down-payment assistance to home buyers in formerly “redlined” neighborhoods where the federal government once denied access to mortgages. Cory Booker would like to create “baby bonds” that would be worth more to children in poorer families, helping them one day to buy houses or other assets.

Both presidential candidates say their proposals would aid in narrowing the enduring black-white wealth gap in America. But neither policy attempts to do that in the most direct way possible — by steering benefits to African-Americans.

Their ideas, along with several others that scholars advocate, are facing a tricky problem today. There’s growing momentum on the left to address the racial wealth gap. But the prospects for race-based policies before the Supreme Court are unpromising, and that’s unlikely to change with five conservative justices. ...

Proponents concerned about the wealth gap instead must come up with policies that have the effect of disproportionately building wealth for African-Americans, without singling them out. ... 

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May 16, 2019 in Tax | Permalink | Comments (1)

Modeling the Internal Revenue Code In A Heterogeneous-Agent Framework: An Application To The TCJA

Rachel Moore & Brandon Pecoraro (Joint Committee on Taxation), Modeling the Internal Revenue Code in a Heterogeneous-Agent Framework: An Application to TCJA:

Macroeconomic models used for tax policy analysis often simultaneously abstract from two features of the US tax code: special tax treatment for preferential capital income, and the joint tax treatment of ordinary capital and labor income. In this paper, we explore the extent to which explicitly accounting for these tax details has macroeconomic implications within a heterogeneous-agent model.

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May 16, 2019 in Scholarship, Tax | Permalink | Comments (1)

Wednesday, May 15, 2019

IRS Seeks Grant Applications For Funding Low Income Taxpayer Clinics

LITC

The IRS has announced (IR-2019-83) that it is accepting grant applications through June 17 for Low Income Taxpayer Clinics for the 2020 grant cycle (Jan. 1 - Dec. 31, 2020):

The LITC Program is a federal grant program administered by the Office of the Taxpayer Advocate at the IRS, led by the National Taxpayer Advocate, Nina E. Olson. Under Internal Revenue Code (IRC) Section 7526, the IRS awards matching grants of up to $100,000 per year to qualifying organizations to develop, expand or maintain an LITC.  An LITC must provide services for free or for no more than a nominal fee.

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May 15, 2019 in IRS News, Tax | Permalink | Comments (0)

Lederman: Does Enforcement Reduce Voluntary Tax Compliance?

Leandra Lederman (Indiana), Does Enforcement Reduce Voluntary Tax Compliance?, 2018 BYU L. Rev. 623 (reviewed by Orly Mazur (SMU) here):

Governments generally use enforcement methods, such as audits and the imposition of penalties, to deter noncompliance with tax laws. Although this approach is consistent with most economic modeling of tax compliance, some scholars caution that enforcement may backfire, “crowding out” taxpayers’ intrinsic motivations to pay taxes to such an extent that they reduce their tax payments. This article analyzes the existing evidence to determine if and when this occurs.

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

Elizabeth Warren’s Wealth Tax Will Aggravate Global Inequality

Monica Victor (S.J.D. 2019, Florida), U.S. Sen. Warren’s Wealth Tax Proposal: Will Fighting U.S. Inequality Aggravate Global Inequality?:

Recently, the U.S. Senator Elizabeth Warren proposed a Wealth Tax on “Americans Super Millionaires” which was announced as a measure to reduce U.S. inequality, to rebuild the American middle class and to promote tax justice. Wealth inequality is a global issue, the imposition of a domestic Wealth Tax without international coordination and agreed international rules about the allocation of taxing rights and wealth among countries will aggravate global inequality and concentrate public revenue in jurisdictions with better enforcement capabilities.

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

Tuesday, May 14, 2019

Polsky: Explaining Choice-Of-Entity Decisions By Silicon Valley Start-Ups

Gregg D. Polsky (Georgia),  Explaining Choice-of-Entity Decisions by Silicon Valley Start-Ups, 70 Hastings L.J. 409 (2019):

Perhaps the most fundamental role of a business tax advisor is to recommend the optimal entity choice for nascent business enterprises. Nevertheless, even in 2018, the choice-of-entity analysis remains highly muddled. Most tax practitioners across the United States consistently recommend flow-through entities, such as LLCs and S corporations, to their clients. In contrast, a discrete group of highly sophisticated tax professionals, those who advise start-ups in Silicon Valley and other hotbeds of start-up activity, prefer C corporations.

Prior commentary has described and tried to explain this paradox without finding an adequate explanation. These commentators have noted a host of superficially plausible explanations, all of which they ultimately conclude are not wholly persuasive. The puzzle therefore remains.

This article attempts to finally solve the puzzle by examining two factors that have been either vastly underappreciated or completely ignored in the existing literature.

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May 14, 2019 in Scholarship, Tax | Permalink | Comments (1)

Mazur: Taxing The Robots

Orly Mazur (SMU), Taxing the Robots, 46 Pepp. L. Rev. 277 (2019):

Robots and other artificial intelligence-based technologies are increasingly outperforming humans in jobs previously thought safe from automation. This has led to growing concerns about the future of jobs, wages, economic equality and government revenues. To address these issues, there have been multiple calls around the world to tax the robots. Although the concerns that have led to the recent robot tax proposals may be valid, this Article cautions against the use of a robot tax. It argues that a tax that singles out robots is the wrong tool to address these critical issues and warns of the unintended consequences of such a tax, including limiting innovation. Rather, advances in robotics and other forms of artificial intelligence merely exacerbate the issues already caused by a tax system that under-taxes capital income and over-taxes labor income.

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May 14, 2019 in Scholarship, Tax | Permalink | Comments (2)

Walker: The Practice And Tax Consequences Of Nonqualified Deferred Compensation

David I. Walker (Boston University), The Practice and Tax Consequences of Nonqualified Deferred Compensation, 75 Wash. & Lee L. Rev. 2065 (2018):

Although nonqualified deferred compensation plans lack explicit tax preferences afforded qualified plans, it is well understood that nonqualified deferred compensation results in a joint tax advantage when employers earn a higher after‐tax return on deferred sums than employees could do on their own. Several commentators have proposed tax reform aimed at leveling the playing field between cash and nonqualified deferred compensation, but reform would not be easy or straightforward. This Article investigates nonqualified deferred compensation practices and shows that joint tax minimization often takes a backseat to accounting priorities and participant diversification concerns.

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

Tax Games, Roadblocks, And Glitches Under The 2017 Tax Legislation

Reuven Avi-Yonah (Michigan), Lily Batchelder (NYU), Cliff Fleming (BYU), David Gamage (Indiana), Ari Glogower (Ohio State), Daniel Hemel (Chicago), David Kamin (NYU), Mitchell Kane (NYU), Rebecca Kysar (Fordham), David Miller (Proskauer, New York), Darien Shanske (UC-Davis), Dan Shaviro (NYU) & Manoj Viswanathan (UC-Hastings), The Games They Will Play: Tax Games, Roadblocks, and Glitches Under the 2017 Tax Legislation, 103 Minn. L. Rev. 1439 (2019) (reviewed by David Gamage (Indiana) here):

This report describes various tax games, roadblocks, and glitches in the tax legislation currently before Congress, titled the Tax Cuts and Jobs Act (TCJA). The complex rules proposed in the House and Senate bills will allow new tax games and planning opportunities for well-advised taxpayers, which will result in unanticipated consequences and costs. These costs may not currently be fully reflected in official estimates already showing the bills adding over $1 trillion to the deficit in the coming decade. Other proposed changes will encounter legal roadblocks that will jeopardize critical elements of the legislation. Finally, in other cases, technical glitches in the legislation may improperly and haphazardly penalize or benefit individual and corporate taxpayers.

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

Kahn: Suspension Of Miscellaneous Itemized Deductions Conflicts With Sound Tax Policy

Douglas A. Kahn (Michigan), Suspension of Miscellaneous Itemized Deductions is Ill-Advised, 102 Tax Notes 777 (Feb. 18, 2019):

Section 67(g), added to the code by the Tax Cuts and Jobs Act, suspends any miscellaneous itemized deductions from 2018 to 2025. A miscellaneous itemized deduction is any itemized deduction that is not listed in section 67(b). This article explains that the suspension of some of the miscellaneous itemized deductions is unjustified and conflicts with fundamental tax policy.

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May 14, 2019 in Scholarship, Tax | Permalink | Comments (2)

Monday, May 13, 2019

An Old Tax Dodge For The Wealthy Is Making A Comeback: 'Upstream Planning'

Barron'sBarron's, An Old Tax Dodge for the Wealthy Is Making a Comeback:

Advisors are dusting off an old tax-savings strategy after it got an enormous boost under the new tax law, enabling taxpayers to wipe out massive potential tax obligations on appreciated assets.

The maneuver is simple: You give a highly appreciated asset—such as stocks that have gone up in value—to a parent or trusted elder, with the understanding that it will be bequeathed back to you. At that point, it gets a step-up in cost basis—which means you can sell the shares immediately without owing any tax on the gains it accumulated since you initially bought the stock.

The key to the renewed interest in this strategy—called “upstream planning” because the assets initially flow from the younger generation to the older—is the new tax law, which doubled the amount anyone can give away in assets, while alive or after death, to $11.4 million. The exemption can be used to shield your estate from taxes upon death or during your lifetime to make tax-free gifts—such as appreciated assets using upstream planning. ...

“People [previously] didn’t want to use up their estate tax exemption, but the whole paradigm has shifted because of this new high exemption amount,” says Jere Doyle, an estate planning strategist at BNY Mellon Wealth Management. “When they doubled the exemption, everyone thought they’d do away with the step-up in basis at death, but that didn’t happen. So this creates a huge opportunity for taxpayers.”

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May 13, 2019 in Tax | Permalink | Comments (0)

Kristin Hickman Completes One-Year Stint In The White House As Special Adviser To OMB

Hickman (2017)Bloomberg Law, Tax Scholar Leaves White House Regulatory Review Office:

Kristin Hickman is no longer working with the White House’s Office of Management and Budget after being hired last year to strengthen its tax expertise.

Hickman, a law professor at the University of Minnesota who specializes in tax administration and administrative law, confirmed in an email to Bloomberg Tax that she wrapped up her time at OMB’s Office of Information and Regulatory Affairs in April. OIRA announced around the same time last year that it had selected Hickman to serve as a special adviser.

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May 13, 2019 in Tax, Tax Prof Moves | Permalink | Comments (0)

The 50 Most-Cited Tax Articles of All Time

Jonathan H. Choi (NYU), The Most-Cited Tax Articles of All Time, 36 Yale J. on Reg.: Notice & Comment (May 11, 2019):

Summer is nearly here, and for fellow tax nerds in need of beach reads, I’ve assembled a list of the 50 most widely cited tax law journal articles. The list is inspired by (and uses the same methodology as) Fred Shapiro and Michelle Pearse’s essay, The Most-Cited Law Review Articles of All Time [110 Mich. L. Rev. 1483 (2012)]

The list below is ordered by number of citations in other law review articles, according to HeinOnline. For comparison, I also list Google Scholar citation counts, which include cites by certain non-law journals, practice publications, books, and courts. 

Most-cited tax articles of all time

  Article HeinOnline Article Cites Google Scholar Cites
1. William D. Andrews (Harvard), A Consumption-Type or Cash Flow Personal Income Tax, 87 Harv. L. Rev. 1113 (1974) 437 783
2. Louis Kaplow (Harvard) & Steven Shavell (Harvard), Why the Legal System Is Less Efficient than the Income Tax in Redistributing Income, 23 J. Legal Stud. 667 (1994) 305 687
3. Boris I. Bittker (Yale), A Comprehensive Tax Base as a Goal of Income Tax Reform, 80 Harv. L. Rev. 925 (1967) 298 464
4. Boris I. Bittker (Yale), Federal Income Taxation and the Family, 27 Stan. L. Rev. 1389 (1975) 284 438
5. Joseph Bankman (Stanford) & Thomas Griffith (USC), Social Welfare and the Rate Structure: A New Look at Progressive Taxation, 75 Cal. L. Rev. 1905 (1987) 227 352
6. Reuven S. Avi-Yonah (Michigan), Globalization, Tax Competition, and the Fiscal Crisis of the Welfare State, 113 Harv. L. Rev. 1573 (2000) 226 748
7. William T. Plumb, Jr. (Hogan & Hartson, Washington, D.C.), The Federal Income Tax Significance of Corporate Debt: A Critical Analysis and a Proposal, 26 Tax L. Rev. 369 (1971) 208 355
8. Walter J. Blum (Chicago) & Harry Kalven, Jr. (Chicago), The Uneasy Case for Progressive Taxation, 19 U. Chi. L. Rev. 417 (1952) 200 418
9. Peter D. Enrich (Northeastern), Saving the States from Themselves: Commerce Clause Constraints on State Tax Incentives for Business, 110 Harv. L. Rev. 377 (1996) 193 371
10. Michael J. Graetz (Columbia), To Praise the Estate Tax, Not to Bury It, 93 Yale L.J. 259 (1983) 185 264
11. Erwin N. Griswold (Harvard), The Need for a Court of Tax Appeals, 57 Harv. L. Rev. 1153 (1944) 185 240
12. Mark G. Kelman (Stanford), Personal Deductions Revisited: Why They Fit Poorly in an Ideal Income Tax and Why They Fit Worse in a Far from Ideal World, 31 Stan. L. Rev. 831 (1979) 177 248
13. Daniel I. Halperin (Harvard), Interest in Disguise: Taxing the Time Value of Money, 95 Yale L.J. 506 (1986) 168 259
14. Joseph T. Sneed (Stanford), The Criteria of Federal Income Tax Policy, 17 Stan. L. Rev. 567 (1965) 164 211
15. Michael J. Graetz (Columbia) & Michael M. O’Hear (Marquette), The “Original Intent” of U.S. International Taxation, 46 Duke L.J. 1021 (1997) 162 345
16. Eric A. Posner (Chicago), Law and Social Norms: The Case of Tax Compliance, 86 Va. L. Rev. 1781 (2000) 155 403
17. David A. Weisbach (Chicago) & Jacob Nussim (Bar-Ilan), The Integration of Tax and Spending Programs, 113 Yale L.J. 955 (2004) 150 245
18. Marjorie E. Kornhauser (Tulane), The Rhetoric of the Anti-Progressive Income Tax Movement: A Typical Male Reaction, 86 Mich. L. Rev. 465 (1987) 146 214
19. R.A. Musgrave (Harvard), In Defense of an Income Concept, 81 Harv. L. Rev. 44 (1967) 140 228
20. Marjorie E. Kornhauser (Tulane), Love, Money, and the IRS: Family, Income-Sharing, and the Joint Income Tax Return, 45 Hastings L.J. 63 (1993) 139 216
21. Paul L. Caron (Pepperdine), Tax Myopia, or Mamas Don’t Let Your Babies Grow up to Be Tax Lawyers, 13 Va. Tax Rev. 517 (1994) 137 155
22. Richard L. Doernberg (Emory) & Fred S. McChesney (Emory), On the Accelerating Rate and Decreasing Durability of Tax Reform, 71 Minn. L. Rev. 913 (1987) 136 183
23. Reuven S. Avi-Yonah (Michigan), The Structure of International Taxation: A Proposal for Simplification, 74 Tex. L. Rev. 1301 (1996) 129 285
24. Anne L. Alstott (Yale), Tax Policy and Feminism: Competing Goals and Institutional Choices, 96 Colum. L. Rev. 2001 (1996) 129 192
25. Stanley S. Surrey (Harvard), Federal Taxation of the Family—The Revenue Act of 1948, 61 Harv. L. Rev. 1097 (1948) 127 218

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May 13, 2019 in Legal Education, Scholarship, Tax, Tax Prof Rankings | Permalink | Comments (5)

Lesson From The Tax Court: Get It In Writing!

Tax Court (2017)Last week’s case of Jason Aaron Cook v. Commissioner, T.C. Memo. 2019-48 (May 7, 2019) (Judge Colvin), teaches a straightforward lesson: if you are not the custodial parent of a child and want to claim the child as your “dependent” within the meaning of §152, you need to obtain a Form 8332, or an equivalent document, from the custodial parent.  You need to get it in writing.

The case also teaches a more fundamental lesson in some of the complexities of family taxation.  The lesson here shows how the tax law indirectly defines families through the concept of dependents.  When a taxpayer can claim someone as a dependent, that triggers a host of different tax rules for that taxpayer---mostly good.  The cumulative effect creates the rules of family taxation. 

The biggest group of dependents are children, at least until more Boomers hit their dotage.  When spouses stay together the idea of defining families through the concept of dependents works pretty well.  When spouses split up, however, it becomes much harder figuring out the appropriate family unit to tax.  Section 152(e) uses a concept of "custodial parent."  Last week’s case is a good illustration of the Tax Code’s basic approach, and its limitations.

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May 13, 2019 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure | Permalink | Comments (2)