Paul L. Caron
Dean




Wednesday, August 10, 2022

The Tax Lawyer Publishes New Issue

The Tax Lawyer has published Vol. 75, No. 4 (Summer 2022):

August 10, 2022 in ABA Tax Section, Scholarship, Tax, Tax Scholarship | Permalink

Cato: IRS Funding Hypocrisy In The Inflation Reduction Act

Chris Edwards (Cato Institute), Senate Bill: IRS Funding Hypocrisy:

The Senate’s Inflation Reduction Act includes an $80 billion increase in the Internal Revenue Service budget over a decade, which would roughly double the agency’s budget by 2031. ...

Senators supporting the bill talk about “tax cheats” and “closing tax loopholes.” But this is a huge hypocrisy. The Senate bill itself creates new loopholes and tax breaks, and complicated breaks drive noncompliance with the tax system. The Senate bill would expand a slew of special‐​interest credits and other breaks within a $370 billion orgy of green subsidies and corporate welfare.

This chart illustrates the relationship between politicians and special‐​interest tax breaks:

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August 10, 2022 in Tax, Tax News | Permalink

Tax Prof Rankings By H-Index Since 2017 (Google Scholar)

Google Scholar (2015)Brian Leiter recently ranked the Top 75 law professors by citations as measured by Google Scholar H-Index All. Only two tax professors ranked in the Top 75:  Alan Auerbach (#8; UC-Berkeley) and James Hines (#24; Michigan). As Brian notes, many law professors do not have Google Scholar pages and citation counts vary by field. For more on the use of Google Scholar to measure law professor scholarly influence, see Gary Lucas (Texas A&M), Measuring Scholarly Impact: A Guide for Law School Administrators and Legal Scholars, 165 U. Pa. L. Rev. Online 165 (2017).

Yesterday I posted Google Scholar H-Index All rankings of the Top 104 tax professors with Google Scholar pages (data collected on August 5). Here are the Google Scholar H-Index Since 2017 rankings of the Top 100 tax professors with Google Scholar pages. If you are a full-time law school tax professor with a Google Scholar page and we missed including you, please contact me.

Rank Name School

Google Scholar H-index (Since 2017)

1 Alan Auerbach UC-Berkeley 43
2 James Hines Michigan 36
3 Reuven Avi-Yonah Michigan 25
3 Dhammika Dharmapala Chicago 25
5 David Weisbach Chicago 20
5 Kimberly Clausing UCLA 20
7 Jacob Goldin Chicago 19
7 Edward McCaffery USC 19
9 Dan Shaviro NYU 18
9 Robert Sitkoff Harvard 18
11 Brian Galle Georgetown 17
11 Kristin Hickman Minnesota 17
13 Daniel Hemel NYU 16
13 Eric Zolt UCLA 16
15 Leandra Lederman Indiana (Maurer) 15
15 Kyle Logue Michigan 15
17 Yariv Brauner Florida 14
17 Chris Sanchirico Penn 14
19 Bridget Crawford Pace 13
19 Nancy Knauer Temple 13
19 Diane Ring Boston College 13
22 David Gamage Indiana (Maurer) 12
22 Zachary Liscow Yale 12
22 Ruth Mason Virginia 12
22 Michael Simkovic USC 12
26 Hugh Ault Boston College 11
26 Clifton Fleming BYU 11
26 Rebecca Kysar Fordham 11
26 Sarah Lawsky Northwestern 11
26 Ajay Mehrotra Northwestern 11
26 Shu-Yi Oei Boston College 11
26 Darien Shanske UC-Davis 11
33 Joshua Blank UC-Irvine 10
33 Victor Fleischer UC-Irvine 10
33 Anthony Infanti Pittsburgh 10
33 Omri Marian UC-Irvine 10
33 Lloyd Hitoshi Mayer Notre Dame 10
33 Nancy McLaughlin Utah 10
33 Susan Morse Texas 10
33 James Repetti Boston College 10
33 Kyle Rozema Washington Univ. 10
33 Stephen Shay Boston College 10
33 Steven Bank UCLA 10
44 Ellen Aprill Loyola-L.A. 9
44 Leslie Book Villanova 9
44 John Brooks Fordham 9
44 John Coverdale Seton Hall 9
44 Kathleen Delaney Thomas North Carolina 9
44 Andrew Hayashi Virginia 9
44 Linda Jellum Idaho 9
44 Leigh Osofsky North Carolina 9
44 Jay Soled Rutgers 9
44 Linda Sugin Fordham 9
44 David Walker Boston Univ. 9
55 Samuel Brunson Loyola-Chicago 8
55 Paul Caron Pepperdine 8
55 Heather Field UC-Hastings 8
55 Francine Lipman UNLV 8
55 Henry Ordower St. Louis 8
55 Gregg Polsky Georgia 8

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August 10, 2022 in Legal Education, Scholarship, Tax, Tax Prof Rankings, Tax Scholarship | Permalink

Avi-Yonah & Gamage: Billionaire Mark-To-Market Reforms

Reuven Avi-Yonah (Michigan; Google Scholar) & David Gamage (Indiana; Google Scholar), Billionaire Mark-to-Market Reforms: Response to Susswein and Brown, 176 Tax Notes Fed. 555 (July 25, 2022):

Tax Notes Federal (2022)In their essay, Is It Time to Tax Disney’s Unrealized Capital Gains From 1965?, [176 Tax Notes Fed. 1717 (June 13, 2022),] Donald B. Susswein and Kyle Brown argue that a mark-to-market reform like the recent proposals for billionaire income tax reforms would amount to double taxation. We explain here why their arguments are incorrect. Instead, the primary impact of enacting a billionaire income tax reform would be to close the loopholes and combat the harmful political-optionality dynamics that enable many billionaire and megamillionaire taxpayers to fully and permanently escape income taxation on the majority of their true investment gains.

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August 10, 2022 in Scholarship, Tax, Tax Analysts, Tax Scholarship | Permalink

Tuesday, August 9, 2022

Tax Prof Rankings By H-Index All (Google Scholar)

Google Scholar (2015)Brian Leiter recently ranked the Top 75 law professors by citations as measured by Google Scholar H-Index All. Only two tax professors ranked in the Top 75:  Alan Auerbach (#8; UC-Berkeley) and James Hines (#24; Michigan). As Brian notes, many law professors do not have Google Scholar pages and citation counts vary by field. For more on the use of Google Scholar to measure law professor scholarly influence, see Gary Lucas (Texas A&M), Measuring Scholarly Impact: A Guide for Law School Administrators and Legal Scholars, 165 U. Pa. L. Rev. Online 165 (2017).

Here are the Google Scholar H-Index All rankings of the Top 104 U.S. tax professors with Google Scholar pages (data collected on August 5). If you are a full-time law school tax professor with a Google Scholar page and we missed including you, please contact me

Rank Name School Google Scholar H-index (All)
1 Alan Auerbach UC-Berkeley 91
2 James Hines Michigan 63
3 David Weisbach Chicago 35
4 Reuven Avi-Yonah Michigan 34
4 Dan Shaviro NYU 34
6 Dhammika Dharmapala Chicago 31
7 Edward McCaffery USC 30
8 Kimberly Clausing UCLA 26
8 Brian Galle Georgetown 26
8 Kyle Logue Michigan 26
8 Chris Sanchirico Penn 26
8 Eric Zolt UCLA 26
13 Robert Sitkoff Harvard 24
14 Nancy Knauer Temple 23
15 Kristin Hickman Minnesota 22
15 Steven Bank UCLA 22
17 Leandra Lederman Indiana (Maurer) 21
18 Jacob Goldin Chicago 20
19 Daniel Hemel NYU 19
19 Richard Kaplan Illinois 19
19 Diane Ring Boston College 19
22 Ellen Aprill Loyola-L.A. 17
22 Yariv Brauner Florida 17
22 Ruth Mason Virginia 17
22 Nancy McLaughlin Utah 17
22 Jay Soled Rutgers 17
27 Hugh Ault Boston College 16
27 Paul Caron Pepperdine 16
27 John Coverdale Seton Hall 16
27 Bridget Crawford Pace 16
27 Victor Fleischer UC-Irvine 16
27 Clifton Fleming BYU 16
33 Anthony Infanti Pittsburgh 15
33 Lloyd Hitoshi Mayer Notre Dame 15
33 Ajay Mehrotra Northwestern 15
33 Gregg Polsky Georgia 15
33 Richard Pomp Connecticut 15
33 Linda Sugin Fordham 15
39 David Gamage Indiana (Maurer) 14
39 Shu-Yi Oei Boston College 14
39 James Repetti Boston College 14
39 Darien Shanske UC-Davis 14
39 Stephen Shay Boston College 14
39 David Walker Boston Univ. 14
45 Bradley Borden Brooklyn 13
45 Sarah Lawsky Northwestern 13
45 Michael Simkovic USC 13
48 Samuel Brunson Loyola-Chicago 12
48 Terrence Chorvat George Mason 12
48 Linda Jellum Idaho 12
48 Rebecca Kysar Fordham 12
48 Francine Lipman UNLV 12
48 Zachary Liscow Yale 12
48 Omri Marian UC-Irvine 12
48 Theodore Seto Loyola-L.A. 12
48 Peter Wiedenbeck Washington Univ. 12
57 Joshua Blank UC-Irvine 11
57 Neil Buchanan Florida 11
57 Stephanie Hoffer Ohio State 11
57 John Miller Idaho 11
57 Susan Morse Texas 11
57 Henry Ordower St. Louis 11

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August 9, 2022 in Legal Education, Scholarship, Tax, Tax Prof Rankings, Tax Scholarship | Permalink

Socialism, Progressive Taxation, And The Fiscal State

Sol Picciotto (Lancaster, London; Google Scholar), Socialism, Progressive Taxation, and the Fiscal State:

This paper traces the philosophical, political, sociological and economic underpinning for the advocacy by socialists of progressive taxation, from the Communist Manifesto to recent supporters of tax justice campaigns. Socialists’ attitudes to taxation have been tied to their primary aim of socialisation of the ownership of the means of production, reflecting the view that inequality and exploitation are inherent in capitalism, which rests on private property enforced by state power. Communism, as developed particularly by Marx and Engels, aimed to transcend capitalism and end the separation of the state from civil society, by the socialisation of property, including through progressive taxation. Marx’s view in Capital volume 3 that the emergence of large scale enterprises already entailed the ‘abolition of capital as private property within the framework of capitalist production itself’, when it was published in 1894 became central to the debates among German socialists (Liebknecht, Kautsky, Bernstein and Luxemburg), and the Austro-Marxists (Renner, Hilferding), but socialists split when graduated direct taxes were introduced to help fund the welfare-warfare state. Goldscheid’s outline for a social science of the state centred on fiscality underpinned his radical and influential wartime proposals to finance the socialisation of large corporations through taxes on capital.

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August 9, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Shu-Yi Oei Leaves Boston College For Duke

Shu-Yi Oei (Boston College; Google Scholar) has accepted a lateral offer from Duke beginning January 2023. Her recent publications include:

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August 9, 2022 in Legal Education, Tax, Tax Prof Moves | Permalink

The Effect Of Tax Reform And COVID-19 On Tax Flight Among U.S. Millionaires

Cristobal Young (Cornell; Google Scholar) & Ithai Lurie (U.S. Treasury Department; Google Scholar), Taxing the Rich: The Effect of Tax Reform and the COVID-19 Pandemic on Tax Flight Among U.S. Millionaires:

Taxing the rich is one of the central policy debates in this time of rising inequality. Elite taxation can change the distribution of income in society, support equitable growth, and finance public goods and services that improve the quality of life for everyone. None of these goals are well served, however, if taxes lead to high levels of tax flight among U.S. millionaires. Progressive taxation, especially at the state level, ultimately depends on the embeddedness of the tax base. In other words, are the rich “mobile millionaires,” readily drawn to places with lower tax rates? Or are they “embedded elites,” who are reluctant to migrate away from places where they have been highly successful?

Supply-side economics has long argued that taxes on the rich cause avoidance behavior and reduce the incentive to work, invest, and innovate. Amid the growing red state/blue state rivalry in the United States, tax incentives for migration have become a new focus of debate. Why would rich people continue to live in New York, New Jersey, or California when they could save large sums in taxes by moving to places such as Florida, Texas, or Nevada? Of course, taxes also fund public goods that the rich consume—not even the richest city dweller can get to work without public infrastructure—but top earners have greater ability to opt out of many public services such as schools and social services. From this view, the rich seem motivated and mobile—sensitive to taxation and readily capable of exit.

Yet there are myriad social dimensions that rich households face when migrating to avoid taxes. Top earners are often the “working rich,” with many roots in the places where they built their careers. Others are business owners with complex ties between customers, suppliers, and workers that are not easily relocated. Top earners are often married, have school-aged children, and have lived in their state for many years—social factors that tie people to places. These ties represent place-specific social capital, a form of embeddedness that makes migration costly.

Our new working paper, Taxing the Rich: How Incentives and Embeddedness Shape Millionaire Tax Flight, examines the joint effect of incentives and embeddedness on the mobility of the rich in the United States. Drawing on administrative tax data from IRS tax returns of top income earners, we study two large-scale “natural experiments,” which are contrasting real-life situations that social scientists investigate to determine cause-and-effect relationships. The first is the federal Tax Cuts and Jobs Act of 2017, which changed tax incentives to favor low-tax states. The second is the COVID-19 pandemic, which began in early 2020 in the United States and which deeply disrupted people’s socioeconomic attachments to places. ...

In a typical year, a small number of millionaires circulate between states: Roughly 2.7 percent of the millionaire population moves across state lines, exchanging one state for another. How much did the 2017 tax reform influence this migration? In our working paper, we examined migration rates for every income group, starting from those with the lowest incomes to those making $5 million a year or more. We also examined migration rates for those living in low-tax states, who were incentivized to stay, and high-tax states, who were incentivized to move. Migration patterns before and after the tax reform law passed were essentially identical. (See Figure 1.)

Figure 1

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August 9, 2022 in Scholarship, Tax, Tax Scholarship, Think Tank Reports | Permalink

Monday, August 8, 2022

Haneman & Weber: The Abandonment Of International College Athletes By NIL Policy

Victoria J. Haneman (Creighton; Google Scholar) & David P. Weber (Creighton; Google Scholar), The Abandonment of International College Athletes by NIL Policy:

A new era in college sports dawned on July 1, 2021. College sports generate billions of dollars in revenue, and the National Collegiate Athletic Association announced that college athletes were (subject to various limitations and restrictions) entitled to earn money based upon name, image, and likeness (NIL) without losing eligibility to compete. It is estimated that more than $917 million in NIL deals have been generated in the first twelve months alone. The more than 450,000 college athletes across the United States are now able to leverage NIL to make paid appearances, endorse products or services on social media, receive compensation for autograph signings, and promote local and national businesses. Excluded from most NIL opportunities, however, are the 12% of athletes recruited from outside of the United States. Most international athletes enter the United States on student (F) visas, which are subject to very specific rules for when employment is permissible in the United States. The creators of the F visa had no reason in 1952 to include an NIL exception to the work prohibition, which consequently results in serious inequity for these athletes today. 

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August 8, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

The Tax Consequences Of Name, Image, And Likeness Rules For College Athletes

Camp (2021)Following the Supreme Court’s decision in National Collegiate Athletic Association v. Alston, 594 U.S. ___ (2021), the NCAA started allowing college athletes to accept payments for use of their name, image and likeness, effective July 1, 2021. That change in policy has created a host of various compliance issues, such as trademark licensing issues. It also has created tax issues for the student-athletes. Frank Messina (Alabama) and Marena M. Messina (Alabama) address the basics in their article “A Primer on the Income Tax Consequences of the NCAA’s Name, Image, and Likeness (NIL) Earnings for College Athletes, 4 Journal of Athletic Development and Experience 189 (2022).  From the article's abstract: "Athletes must learn to understand the tax rules associated with the income from the NIL.”  Click the "continue reading" button for the full abstract .

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August 8, 2022 in Bryan Camp, Miscellaneous, Scholarship, Tax, Tax Scholarship | Permalink

Lesson From The Tax Court: Non-Receipt of 1099 Does Not Get You Out of Penalties

Camp (2021)When we think of penalties we naturally think of punishment.  I mean, to channel Steven Wright, if a penalty is not punishment when why does the word start with “penal”?  Both this week and next week’s lesson teach us how penalties serve other purposes as well.  Today, in Lionel E. Larochelle and Molly B. Larochelle v. Commissioner, T.C. Summ. Op. 2022-12 (July 12) (Judge Leyden), we learn why non-receipt of a Form 1099 does not constitute reasonable cause to escape the §6662(a) penalty for making a substantial understatement of tax.  Next week we will look at whether a court-ordered disgorgement of illegal gains is a penalty for purposes of a §162(f) prohibition on  deductions for governmental fines or penalties.  Today’s short lesson awaits below the fold. 

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August 8, 2022 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (1)

TaxProf Blog Weekend Roundup

Sunday, August 7, 2022

Forty Democratic Lawmakers Call For IRS Investigation Into Family Research Council's ‘Church’ Status

Following up on my previous post, ProPublica: Family Research Council Is Now A Church In The Eyes Of The IRS:  Washington Post, Democrats Call on IRS to Review Right-Wing Group’s ‘Church’ Status:

FRCCongressional House Democrats are asking the IRS to review the tax-exempt status of a prominent conservative advocacy group recently reclassified as a church, arguing the organization may be exploiting the designation to avoid scrutiny.

Forty Democratic lawmakers, led by U.S. Reps. Suzan DelBene (Wash.) and Jared Huffman (Calif.), outlined their concerns about the Family Research Council in a letter sent to the head of the IRS and the secretary of the Treasury on Monday. According to a recent report from ProPublica, the FRC successfully applied to be reclassified as a “group of churches” in 2020.

Lawmakers say that while the FRC often appeals to faith and advocates for a “biblical worldview,” the status change “strains credulity” because the group operates primarily as “a political advocacy organization.”

“They do not hold religious services, do not have a congregation or affiliated congregations, and do not possess many of the other attributes of churches listed by the IRS,” the letter reads. “FRC is one example of an alarming pattern in the last decade — right-wing advocacy groups self-identifying as ‘churches’ and applying for and receiving church status.” ...

Among the letter’s signatories are U.S. Reps. Jamie Raskin (Md.), Adam B. Schiff (Calif.), Rosa L. DeLauro (Conn.), Rashida Tlaib (Mich.), Jan Schakowsky (Ill.) and Debbie Wasserman Schultz (Fla.).

Washington Times, Democratic Lawmakers Demand IRS Probe of Family Research Council’s Tax Status:

The head of the Family Research Council said Tuesday evening that a call by 40 Congressional Democrats for a Treasury Department/IRS investigation of the group’s “association of churches” tax-exempt status was “factually challenged” and asserted the organization isn’t “trying to hide anything” from the public.

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August 7, 2022 in Faith, Legal Education, Tax | Permalink

The Top Five New Tax Papers

There is a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new paper debuting on the list at #5. The #1 paper is #927 among 16,941 tax papers in all-time downloads:

  1. SSRN Logo (2018)[672 Downloads]  Tax Administration and Technology: From Enhanced to No-Cooperation?, by João Félix Pinto Nogueira (Catholic University Portugal & IBFD; Google Scholar)
  2. [331 Downloads]  Congress Takes Its War On Cash To Digital Assets: Understanding Tax Code Section 6050I, by Abraham Sutherland (Virginia; Google Scholar)
  3. [324 Downloads]  The Treatment of Tax Incentives under Pillar Two, by Belisa Ferreira Liotti (Google Scholar), Joy Waruguru Ndubai, Ruth Wamuyu, Ivan Lazarov (Google Scholar) & Jeffrey Owens (all of Vienna University of Economics and Business)
  4. [273 Downloads]  Preventing Unacceptable Tax Treaty Overrides, by Craig Elliffe (Auckland; Google Scholar)
  5. [245 Downloads]  Would the Securing a Strong Retirement Act Secure More Retirement Equity?, by Albert Feuer (Law Offices of Albert Feuer, New York; Google Scholar)

August 7, 2022 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink

Saturday, August 6, 2022

This Week's Ten Most Popular TaxProf Blog Posts

Penn Wharton: Decomposing The Decline In Estate Tax Liability Since 2000

Penn Wharton Budget Model, Decomposing the Decline in Estate Tax Liability Since 2000:

We estimate that the federal estate tax would have generated 9 times more revenue in 2019 without the tax changes in 2001 and 2017.

Penn Wharton

Key Points

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August 6, 2022 in Tax, Tax Scholarship, Think Tank Reports | Permalink

Friday, August 5, 2022

Tax Policy In The Biden Administration

WSJ: The IRS Is About To Go Beast Mode

Wall Street Journal Editorial, The IRS Is About to Go Beast Mode:

IRS Logo 2Progressives want Joe Biden to unleash what they call “beast mode” executive power, and the Schumer-Manchin tax bill supplies the cash to turn the Internal Revenue Service into Wolverine.

The pact between Sen. Joe Manchin and Majority Leader Chuck Schumer includes $80 billion in new funding for the tax man. Democrats claim this “investment” will yield more than $200 billion in revenue. That estimate is highly speculative, but if it’s anywhere close to right IRS auditors will soon be coming after tens of millions of Americans.

The $80 billion is more than six times the current annual IRS budget of $12.6 billion. The money will be ladled out over nine years and comes with few strings attached. The main Democratic command is for the tax agency to bring the hammer down on taxpayers. ...

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August 5, 2022 in IRS News, Tax | Permalink

Thursday, August 4, 2022

Georgia: Unborn Children Qualify For $3,000 Income Tax Dependent Exemption After Six Weeks

Update:  New York Times, Georgia Abortion Law Says a Fetus Is Tax Deductible

Georgia Department of Revenue, Guidance Related to House Bill 481, Living Infants and Fairness Equality (LIFE) Act:

Georgia DOR 4In light of the June 24, 2022, U.S. Supreme Court ruling in Dobbs v. Jackson Women’s Health Organization and the July 20, 2022, 11th Circuit Court of Appeals ruling in Sistersong v. Kemp, the Department will recognize any unborn child with a detectable human heartbeat, as defined in O.C.G.A. § 1-2-1, as eligible for the Georgia individual income tax dependent exemption. The 11th Circuit’s ruling made HB 481’s amendment to O.C.G.A § 48-7-26(a), adding an unborn child with a detectable heartbeat to the definition of dependent, effective as of the date of the court’s ruling, which was July 20, 2022.

As such, on individual income tax returns filed for Tax Year 2022 where, at any time on or after July 20, 2022, and  through December 31, 2022, a taxpayer has an unborn child (or children) with a detectable human heartbeat (which may occur as early as six weeks’ gestation), the taxpayer may claim a dependent personal exemption as provided for under O.C.G.A § 48-7-26(a) and (b)(3) in the amount of $3,000.00 for each unborn child.  For Tax Year 2022, the deduction for dependent unborn children will be a subtraction on Line 12, “Other Adjustments,” of Form 500 Schedule 1.

Similar to any other deduction claimed on an income tax return, relevant medical records or other supporting documentation shall be provided to support the dependent deduction claimed if requested by the Department.

Additional information, including return instructions to claim the personal exemption for an unborn child with a detectable heartbeat, will be issued later this year along with other tax changes impacting Tax Year 2022 Georgia individual income tax returns. 

Washington Post, Georgia Says ‘Unborn Child’ Counts as Dependent on Taxes After 6 Weeks:

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August 4, 2022 in Tax, Tax News | Permalink

Goldin & Kleiman: Whose Child Is This? Improving Child-Claiming Rules In Safety Net Programs

Jacob Goldin (Chicago; Google Scholar) & Ariel Jurow Kleiman (Loyola-L.A.; Google Scholar), Whose Child Is This? Improving Child-Claiming Rules in Safety-Net Programs, 131 Yale L. J. 1719 (2022):

Yale Law Journal (2022)To address the staggering problem of child poverty in the United States, policymakers distribute a host of safety-net and transfer programs designed to support children and families. All of these programs require rules to determine how benefits are distributed. Among the more important of these are “child-claiming” rules. These rules determine which adults can receive benefits for which children, driving how well a program helps recipients and satisfies societal goals.

This Article critically assesses the design of child-claiming rules for safety-net programs, using as case studies the Child Tax Credit and the Earned Income Tax Credit.

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August 4, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Case Western Seeks To Hire An Entry Level Or Lateral Tax Prof

Case Western Reserve University Academic Careers, Open Rank Faculty Positions (tenured/tenure-track) - School of Law:

Case Western Logo (2022)Case Western Reserve University School of Law invites applications for tenured or tenure-track faculty positions, beginning July 2023.

The school is seeking entry-level candidates with demonstrated law teaching and scholarship potential, as well as lateral candidates with strong scholarly track records and substantial law teaching experience. Areas of interest for teaching and scholarship include environmental law, property, copyright, trademark, torts, tax, commercial law, and family law. Appointment will be considered at the Assistant, Associate, or Full Professor level, based upon prior teaching experience and scholarship. Positions may include the opportunity to teach in the Kramer Law Clinic, or administrative responsibilities in the Coleman P. Burke Center for Environmental Law or the Spangenberg Center for Law, Technology, and the Arts.

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August 4, 2022 in Legal Education, Tax, Tax Prof Jobs | Permalink

Wednesday, August 3, 2022

Knoll & Mason: Bibb Balancing

Michael S. Knoll (Penn) & Ruth Mason (Virginia; Google Scholar), Bibb Balancing, 91 Geo. Wash. L. Rev. __ (2023):

Gw-law-reviewCourts and commentators have long understood dormant Commerce Clause doctrine to contain two types of cases: discrimination and undue burdens. This Article argues for a more nuanced understanding that divides undue burdens into single-state burdens—which arise from the application of a single state’s law alone—and mismatch burdens, which arise from legal diversity. Although the Supreme Court purports to apply Pike balancing in all undue-burden cases, we show that the Court’s approach in mismatch cases differs substantially. Specifically, unlike in single-state cases, balancing in mismatch cases involves an implicit and potentially problematic comparison by the Court between the challenged state’s regulation and those of other states. We label analysis in mismatch cases “Bibb balancing,” after the famous mudflaps case, and we show that mismatch cases present the Court with a more challenging set of issues than do other types of dormant Commerce Clause cases. 

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August 3, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Gianni: Supervisory Approval Of Penalties—The Opening Of A Graev Pandora's Box

Monica Gianni (CSUN), Supervisory Approval of Penalties: The Opening of a Graev Pandora's Box, 75 Tax Law. __ (2022):

Tax-lawyerSection 6751(b) of the Internal Revenue Code requires supervisory approval in writing prior to assessment of certain penalties. Enacted in 1998 as part of the Internal Revenue Service (“IRS”) Restructuring and Reform Act, the statute’s purpose was to prevent IRS agents from using penalties as bargaining chips. The section remained essentially dormant for over 20 years, with both the IRS and taxpayers accepting the position that approval needed to be obtained only prior to assessment. The trilogy of Graev cases and a decision of the Second Circuit Court of Appeals in Chai v. Commissioner changed the § 6751(b) landscape completely, opening a Pandora’s box of taxpayers using § 6751(b) to avoid penalties on the technicality of no-written-supervisory approval. Hundreds of court cases have followed, resulting in cases inconsistently interpreting § 6751(b) and well-counseled taxpayers avoiding tax penalties.

This article examines the enactment of § 6751(b) and explores in detail the Graev and Chai decisions.

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August 3, 2022 in ABA Tax Section, Scholarship, Tax, Tax Scholarship | Permalink

Federalist Society: Are IRS Defenses Crumbling?

Federalist Society, Are IRS Defenses Crumbling?:

The continuous stream of regulations and other guidance the Internal Revenue Service (IRS) must publish to inform the public how it is going to implement, administer, and enforce the frequent, numerous, and complicated changes to the tax laws, along with the high dollar stakes involved, create constant opportunities and incentives to challenge the IRS.

Some contend that the IRS’s ability to defend itself against these challenges seems to be vanishing as one after another of their recent court cases have been unsuccessful.

Our speakers discussed this in more detail, along with what they might portend for how the Internal Revenue Service and the Treasury Department issue future guidance. Another direction to watch is at the other end of Pennsylvania Avenue: will Congress begin to do a better job drafting laws and providing instructions and guidance about how they are to be implemented, administered, and enforced?

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August 3, 2022 in IRS News, Tax | Permalink

Tuesday, August 2, 2022

Florida Tax Review Publishes New Issue

The Florida Tax Review has published Vol. 25, No. 1 (Fall 2021):

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August 2, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

DePaul Seeks To Hire An Entry Level Tax Prof

DePaul Faculty Jobs, Assistant Professor (Tenure Track) - Law (23-24):

DePaul Logo (2018)DePaul University College of Law invites applications from entry-level candidates for a tenure-track position expected to begin July 1, 2023. We have particular interest in the areas of Business Law, Contracts, Tax, Commercial Law, and Antitrust. 

DePaul Law is committed to improving society by educating purpose-driven lawyers who will serve their clients, the legal profession, and the broader community in ways that enhance access to justice and promote equitable policies and processes. We enthusiastically encourage applicants who would enrich the diversity of our community to apply. ...

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August 2, 2022 in Legal Education, Tax, Tax Prof Jobs | Permalink

Henderson: The End Of The 'End Of History' Era — Extreme Wealth Concentration

Bill Henderson (Indiana), The End of the “End of History” Era:

Henderson

Apolitical technicians working in an ahistorical profession. What are the odds of a happy ending?

The graphic above summarizes the U.S. top marginal income tax rate from 1913 (the year the 16th Amendment was ratified by the states) to 2021. One clear takeaway is that for the vast bulk of the 20th century, the wealthy paid much higher taxes.

As the graphic suggests, however, that changed with the election of Ronald Reagan, whose inaugural address launched an ideological revolution with a simple and memorable message: “government is not the solution to our problem, government is the problem.” Reagan Inaugural Address (Jan 21, 1981). Thus, with the public’s consent, top marginal tax rates were slashed throughout the 1980s. At the 1988 Republican Convention, George H.W. Bush (Reagan’s VP) spoke the words, “read my lips: no new tax,” which helped him defeat Michael Dukakis in the general election. See Lily Rothman, “The Story Behind George H.W. Bush’s Famous ‘Read My Lips, No New Taxes’ Promise,” Time, Dec 1, 2018. Yet, the political mood of the late 1980s was also strongly anti-deficit. In 1990, when Congress enacted pay-as-you-go rules for federal budgeting, Bush, who was saddled with a massive Saving & Loan bailout, agreed to increase the top marginal rate from 28% to 31% — an act that arguably ended his political career. See Howard Gleckman, “Reading President Bush’s Lips,” Tax Policy Center, Dec 5, 2018.

Since the early 1990s, much of the electorate has enjoyed the political stability and relative economic prosperity of the “End of History” era, which is a reference to Francis Fukuyama’s famous 1989 essay and 1992 book. Surveying the geopolitical landscape, including the market-based reforms being implemented in China and the former Soviet Union, Fukuyama concluded that there were no longer any “viable systematic alternatives to Western liberalism.” Fukuyama, “The End of History?,” The National Interest (Summer 1989) at 3. Full global realization and consciousness may not occur for a few more decades, as small-scale governments based on nationalism or religion would likely linger. But, Fukuyama argued, the outcome of history was no longer in doubt.

I would argue that over the last three decades, a large portion of the legal profession (myself included) slipped into a comfortable “End of History” cocoon. As we built our careers, sent our kids to highly ranked universities, and monitored the size and status of our retirement accounts, we took political stability as a given. Thus, we became oblivious to growing fissures and cracks that might threaten the rule of law. Can an ahistorical profession be learned? ...

Today’s post is a bridge between Part I, which focused on the original Gilded Age lawyers (Post 312), and next Sunday’s Part II, which will carefully consider three empirically based theories of national decline.

In Part I, I acknowledged that for nearly four decades, virtually all my life decisions were premised on the unstated assumption of ongoing (perhaps unending?) political stability and relative economic prosperity (the unstated assumption). However, after living through the national and global turmoil of the last several years, including past and potential future coup attempts against the U.S. government, my unstated assumption has been revealed to be foolish and decadent wishcasting. ...

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August 2, 2022 in Legal Education, Tax | Permalink

Monday, August 1, 2022

Amarante: States As Laboratories For Charitable Compliance—An Empirical Study

Eric Franklin Amarante (Tennessee; Google Scholar), States as Laboratories for Charitable Compliance: An Empirical Study, 90 Geo. Wash. L. Rev. 445 (2022):

Gw-law-reviewEach year, the Internal Revenue Service (“IRS”) awards 501(c)(3), tax exempt status to thousands of organizations that do not meet the statutory requirements for charities. This is because the IRS, facing increasingly severe budget cuts, adopted a woefully inadequate application process that fails to identify even the most obvious of unworthy applicants. To illustrate this problem, this Article reviews the formation documents of 500 charities that received 501(c)(3) status in 2018 using this new application process. The results of this study are dramatic as they are upsetting: In Florida, only 41.11% of the charities in the study met the statutory requirements necessary for 501(c)(3) status. In Ohio, that number is 33.33%, meaning that two-thirds of the organizations using the new application process were incorrectly awarded 501(c)(3) status. The worst performing state in the study, Idaho, boasted only 22.08% of organizations meeting the statutory test.

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August 1, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Virtual Roundtable Tomorrow On Starving The Beast: Ronald Reagan And The Tax Cut Revolution

Starving the Beast 2On behalf of the Ronald Reagan Institute, the Washington, D.C. Office of the Ronald Reagan Presidential Foundation and Library, we invite you to attend the next iteration of the Reagan Scholars Virtual Roundtable Series from 1:00 pm to 3:00 pm Eastern Time on Tuesday, August 2, 2022. Ronald Reagan Institute will host a virtual roundtable on August 2 from 1:00 p.m. - 2:00 p.m. ET. If you would like to attend, please contact Anthony Eames

For this session, we welcome Professor Monica Prasad of Northwestern University. She is the author of Starving the Beast: Ronald Reagan and the Tax Cut Revolution - winner of the best book award in economic sociology. Dr. Brian Domitrovic, Richard S. Strong Scholar at the Laffer Center for Supply-Side Economics, will offer his own comments in response. He is a leading authority on the history of on supply-side economics. See his recent book The Emergence of Arthur Laffer: The Foundations of Supply-Side Economics in Chicago and Washington, 1966-1976 

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August 1, 2022 in Conferences, Scholarship, Tax, Tax Scholarship | Permalink

Lesson From The Tax Court: Excise Tax On Messed Up IRA Rollover Different From Income Tax

Camp (2021)The tax laws are conflicted.  They encourage retirement savings by permitting taxpayers to deduct contributions to their Individual Retirement Accounts (IRA’s).  But that encouragement is hedged by various restrictions and caps as well as a special excise tax imposed on contributions that exceed the applicable caps.  And Congress crosses its fingers if taxpayers take early distributions.  Those can result in penalties as well as inclusion in gross income.  However, Congress uncrosses those fingers if the early distributions are properly rolled into another IRA.

Given these various statutory hedges and crossed-fingers, it’s no wonder that navigating the tax rules for retirement accounts is tricky!  Particularly tricky are managing rollovers from one type of retirement plan to another.  Mistakes there can have both income tax consequences and excise tax consequences.  Thus, we must always keep straight the difference between different types of taxes, just like we saw in last week’s lesson.

This week, we learn how excise tax consequences are different than income tax consequences of a messed up IRA rollover.  In Clair R. Couturier, Jr. v. Commissioner, T.C. Memo. 2022-69 (July 6, 2022) (Judge Lauber), the taxpayer escaped a huge income tax liability for messing up some of the rollover rules because the limitation period for assessment had run, but got snagged for a $8.5 million excise tax for excess IRA contributions.  Yeah, we’re talking a lot of money here, putting enough at risk for the taxpayer to hire one of the best tax lawyers in the country to represent him.  Alas, even Lavar Taylor could not pull him out of the $8.5 million hole.  He tried to argue that the IRS was bound by the income tax characterization of the transaction.  The Court rejected that argument because...an excise tax is not an income tax.  Details below the fold. 

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August 1, 2022 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (0)

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August 1, 2022 in About This Blog, Legal Education, Tax | Permalink

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August 1, 2022 in About This Blog, Legal Education, Tax | Permalink

TaxProf Blog Weekend Roundup

Sunday, July 31, 2022

The Top Five New Tax Papers

This week's list of the Top 5 Recent Tax Paper Downloads is the same as last week's list. The #1 paper is #1,019 among 16,932 tax papers in all-time downloads:

  1. SSRN Logo (2018)[636 Downloads]  Tax Administration and Technology: From Enhanced to No-Cooperation?, by João Félix Pinto Nogueira (Catholic University Portugal & IBFD; Google Scholar)
  2. [463 Downloads]  Tax Neutrality Regimes and GloBE, by Leopoldo Parada (Leeds; Google Scholar)
  3. [327 Downloads]  Congress Takes Its War On Cash To Digital Assets: Understanding Tax Code Section 6050I, by Abraham Sutherland (Virginia; Google Scholar)
  4. [312 Downloads]  The Treatment of Tax Incentives under Pillar Two, by Belisa Ferreira Liotti (Google Scholar), Joy Waruguru Ndubai, Ruth Wamuyu, Ivan Lazarov (Google Scholar) & Jeffrey Owens (all of Vienna University of Economics and Business)
  5. [268 Downloads]  Preventing Unacceptable Tax Treaty Overrides, by Craig Elliffe (Auckland; Google Scholar)

July 31, 2022 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink

Saturday, July 30, 2022

This Week's Ten Most Popular TaxProf Blog Posts

ABA Tax Section|Tax Analysts Public Service Tax Fellowship Application Deadline Extended

ABA Tax Section has extended the application deadline to August 15 for the Tax Analysts Public Service Fellowship:

ABA Tax Analysts 2The ABA Tax Section and Tax Analysts (the publisher of Tax Notes) have partnered to launch a new public interest fellowship to start this September. Tax Analysts Public Service Fellows will be funded by Tax Analysts to work for two years practicing public interest tax law. The fellowship is geared toward either those with an LLM in tax or experienced attorneys including those seeking to move into the public interest sector. The inaugural fellow will work at La Posada Tax Clinic in Twin Falls, Idaho. You can learn more about Bob Wunderle, who runs La Posada, and his important work providing a range of tax services to vulnerable populations including farm workers throughout the state of Idaho in this podcast from Tax Notes. Applications are due August 15 – the application and more information are available here.

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July 30, 2022 in Legal Education, Tax, Tax Analysts | Permalink

Friday, July 29, 2022

Weekly SSRN Tax Article Review And Roundup: Speck Reviews Klein’s The Corporate Tax Paradox

This week, Sloan Speck (Colorado; Google Scholar) reviews a new work by Israel Klein (Ariel University; Google Scholar), The Corporate Tax Paradox, 42 Va. Tax Rev. __ (2022).

Sloan-speck

In The Corporate Tax Paradox, Israel Klein presents (and offers a resolution to) a puzzle: After the IRS began requiring certain corporate taxpayers to report uncertain tax positions in 2010, the net dollar value of these positions increased annually for large public companies, growing from $162 billion in 2013 to $241 billion in 2020. If the IRS has quantitative and qualitative information on these uncertain tax positions, why doesn’t it audit each and every one of them to conclusion? Alternatively, why do large public companies continue to report these uncertain (and, in Klein’s terminology, unsustainable) positions, if they’re required to be disclosed to both shareholders and the IRS?

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July 29, 2022 in Scholarship, Sloan Speck, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Tax Policy In The Biden Administration

Brunson: Decentralized Autonomous Organizations And Futureproofed Tax Status

Samuel D. Brunson (Loyola-Chicago; Google Scholar), Decentralized Autonomous Organizations and Futureproofed Tax Status:

In the last half decade, digital autonomous organizations have exploded. Where there was no such thing prior to 2016, there are now at least 4,000. There is some debate over what type of legal entity, if any, a DAO is. But, thanks to the check-the-box election, developed in response to LLCs, there is no question about the entity status of DAOs. They default as partnerships.

Figuring out the default tax status of DAOs does not end the entity issue, though. Partnership taxation comes with certain obligations, obligations that at times run counter to the ethos of crypto investment. For instance, the anonymity that crypto promises is incompatible with partnerships' tax obligation to collect information about their partners.

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July 29, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Thursday, July 28, 2022

Kysar: Interpreting By The Rules

Rebecca M. Kysar (Fordham; Google Scholar), Interpreting by the Rules, 99 Tex. L. Rev. 1115 (2021):

Texas Law ReviewA promising new school of statutory interpretation has emerged that tries to wed the work of Congress with that of the courts by tying interpretation to congressional process. The primary challenge to this process-based interpretive approach is the difficulty in reconstructing the legislative process. Scholars have proposed leveraging Congress’s procedural frameworks and rules as reliable heuristics to that end. This Article starts from that premise but will add wrinkles to it. The complications stem from the fact that each rule is adopted for distinct reasons and is applied differently across contexts. As investigation into these particularities proceeds, it becomes apparent that the complications are also rooted in something deeper—that Congress’s procedures are often hollow, even fraudulent. Congress, it turns out, breaks its own rules with impunity.

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July 28, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Mississippi Seeks To Hire An Entry Level Or Lateral Tax Prof

University of Mississippi Law Seeks Tenure-Track Faculty:

Mississippi (2021)The University of Mississippi School of Law invites applications from entry-level and lateral candidates for multiple tenure-track faculty positions beginning August 2023. We welcome applications from outstanding candidates in all curricular areas, but have particularly strong teaching needs in tax, bankruptcy, intellectual property, business law, and health care law, in addition to classes in the first-year curriculum. All applicants must have a JD or PhD or equivalent degree by the date of their appointment, and should show either great promise or a record of excellence in both scholarship and teaching.

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July 28, 2022 in Legal Education, Tax, Tax Prof Jobs | Permalink

IRS: No Political Influence In Comey|McCabe Audits

Following up on my previous posts:

Bloomberg, IRS Tells Senators No Political Influence in Comey Audit:

IRS officials at a closed-door meeting on Tuesday expressed confidence that audits of two former FBI leaders were not politically motivated, senators said.

IRS Commissioner Chuck Rettig “was pretty clear that there was no political interference,” Sen. Ben Cardin (D-Md.) said following the meeting between the Senate Finance Committee and IRS officials. ...

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July 28, 2022 in IRS News, Tax, Tax News | Permalink

Wednesday, July 27, 2022

Cui: Strategic Incentives For Pillar Two Adoption

Wei Cui (British Columbia; Google Scholar), Strategic Incentives for Pillar Two Adoption:

I analyze countries’ strategic incentives for adopting elements of the OECD’s Pillar Two proposal for reforming international taxation. I treat the three components of Pillar Two—the Income Inclusion Rule (IIR), the Under-Taxed Profits Rule (UTPR), and the Qualified Domestic Minimum Top-Up Tax (QDMT)—as independent of one another. Countries are assumed to make strategic decisions about whether to adopt each component simultaneously with other countries facing similar choices, each aiming to maximize its own objectives.

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July 27, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

No New Tax Cuts? Examining The Rescue Plan's New State Tax Limits

Conor Clarke (DOJ; Google Scholar) & Edward G. Fox (Michigan; Google Scholar), No New Tax Cuts? Examining the Rescue Plan's New State Tax Limits, 103 Tax Notes St. 1361 (Mar. 28, 2022):

Tax-notes-stateIn this article, Clarke and Fox examine the American Rescue Plan Act’s restrictions on state tax cuts, arguing that the restrictions are a variation on more familiar maintenance-of-effort provisions. These provisions are common, and are designed to help ensure that federal grants supplement rather than supplant state spending by requiring the state to maintain its level of spending on a program. Clarke and Fox conclude that the Rescue Plan’s requirements create similar incentives, and argue that the similarity makes it more likely that the act’s tax provisions are consonant with the Constitution’s spending clause.

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July 27, 2022 in Scholarship, Tax, Tax Analysts, Tax Scholarship | Permalink

Scharff: The Home Rule For The 21st Century Project's State Support For Local Democracy Provisions

Erin Adele Scharff (Arizona State), Local Budgets, Local Decisions: The Home Rule for the 21st Century Project's State Support for Local Democracy Provisions, 100 N.C. L. Rev. 1505 (2022):

North Carolina Law ReviewAs scholars of local government have long noted, without adequate local revenue, home rule provides hollow legal authority. Recognizing the importance of local revenue, the National League of Cities’ Principles of Home Rule for the 21st Century (“Principles”) explicitly includes taxation as a power granted by home rule and articulates a constitutional commitment to adequate intergovernmental aid. To further strengthen local budgetary control, the model bans unfunded mandates and incorporates an anti-coercion principle that requires conditions on state aid relate to the purposes of such aid. 

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July 27, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Tuesday, July 26, 2022

Jeremy Bearer-Friend Wins Article Award For 'Colorblind Tax Enforcement'

Bearer-Friend (2021)Jeremy Bearer-Friend (George Washington; Google Scholar) received the Senior Paper Award for his article, Colorblind Tax Enforcement, 97 N.Y.U. L. Rev. 1 (2022), at the ComplianceNet Conference (program) held at the University of Amsterdam Law School earlier this month:

The United States Internal Revenue Service (IRS) has repeatedly taken the position that because the IRS does not ask taxpayers to identify their race or ethnicity on submitted tax returns, IRS enforcement actions are not affected by taxpayers’ race or ethnicity. This claim, which I call “colorblind tax enforcement,” has been made by multiple IRS Commissioners serving in multiple administrations (both Democratic and Republican). This claim has been made to members of Congress and to members of the press.

In this Article, I refute the IRS position that racial bias cannot occur under current IRS practices.

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July 26, 2022 in Legal Education, Scholarship, Tax, Tax Scholarship | Permalink

Tennessee Seeks To Hire An Entry Level Or Lateral Tax And Estate Planning Professor

Position Notice: Faculty Positions, University of Tennessee College of Law:

Tennessee (2020)The University of Tennessee College of Law invites applications from both entry-level and lateral candidates for up to four full-time, tenure-track faculty positions to begin at the start of the 2023-24 academic year. The College is interested in candidates with scholarly aptitude and experience in one or more of the following curricular areas:

  • Advocacy Clinic (a civil, juvenile, and criminal law direct legal services clinic)
  • Business law (including business associations and contracts)
  • Criminal law (both substantive and procedural)
  • Environmental law
  • Estate planning and tax
  • Health law
  • Property
  • Technology and data privacy

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July 26, 2022 in Legal Education, Tax, Tax Prof Jobs | Permalink

Do You Need A Tax LL.M. To Land A Great Job Right Now?

Following up on my previous post, Is Getting A Tax LL.M. A Good Idea?:  Bloomberg Tax, Do You Need a Tax LL.M. to Land a Great Job Right Now?:

LLM 2Despite worries about the economy, the job market remains relatively healthy. US payrolls gained 372,000 jobs last month, and the unemployment rate remained at 3.6%—comparable to pre-Covid-19 levels in February 2020.

Over the past month, job growth was strong in the legal and accounting fields—and that’s not expected to change. According to the Bureau of Labor Statistics, law jobs are projected to grow 9% from 2020 to 2030, about as fast as the average for all occupations, while jobs for accountants and auditors will grow 7%.

Even with the number of available jobs, candidates are looking for the extras that will make them stand out. So what does that look like? In some cases, the difference maker might be school or work performance—while other notables include languages, internships, and life experience.

Over the years, I’ve fielded questions from aspiring accountants and lawyers about career choices. One that comes up quite often is whether earning a tax LL.M. will give you an edge or make it easier to get a job. As with many things in the tax world, it depends. ...

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July 26, 2022 in Legal Education, Tax, Tax News | Permalink

Monday, July 25, 2022

WSJ: The Fine Print Cost A Widow A $464,000 Charitable Tax Deduction

Wall Street Journal Tax Report, The Fine Print Cost a Widow a $464,000 Tax Deduction:

Charitable donors, beware: A widow has lost a $464,000 tax deduction for a gift to a museum because her tax paperwork lacked a few key words.

The recent Tax Court decision in Albrecht v. Commissioner [T.C. Memo. 2022-53 (May 25, 2022)] is a fresh reminder of how rigid the standards for charitable deductions often are.

Here are the facts in the case. Over the years Martha Albrecht and her husband amassed a large collection of Native American jewelry and artifacts. In late 2014 Ms. Albrecht, by then a widow, donated about 120 items to the Wheelwright Museum of the American Indian in Santa Fe, N.M., a well-known institution.

On her 2014 tax return, Ms. Albrecht claimed a charitable-donation deduction of $463,676 for her gift. Although her income wasn’t large enough to take the entire deduction for 2014, the law allowed her to carry over and use the remainder for five more years. Attached to her return was a five-page Deed of Gift detailing the donation.

Among other things, the deed said the gift was irrevocable and unconditional. However, Ms. Albrecht didn’t have what the law calls a “contemporaneous written acknowledgment” from the museum explicitly saying whether or not she received goods or services in return for her donation.

Bryan Camp, a professor at Texas Tech University’s law school and a noted tax blogger, calls this “the magic language requirement,” although the wording can vary. Even if no goods or services were provided to Ms. Albrecht by the Wheelwright, she needed this statement in hand before filing her tax return to be eligible for a deduction. This requirement has been in the law since 1994, after Congress enacted it to crack down on padded and dubious deductions.

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July 25, 2022 in New Cases, Tax, Tax News | Permalink

Lesson From The Tax Court: No §6015 Equitable Relief For §6672 Penalties

Camp (2021)The Internal Revenue Code is full of taxes and penalties.  Oh my, so many taxes and penalties!  You must always stay aware of which kinds of taxes or penalties are at issue in order to know what rules of law apply.  This week and next week will give us two lessons on the importance in keeping straight the different kinds of taxes and penalties.

In Angela M. Chavis, 158 T.C. No. 8 (June 15, 2022) (Judge Lauber), the taxpayer was seeking spousal relief under §6015(f) from Trust Fund Recovery Penalties assessed per §6672 against her and her then-husband.  The liability for §6672 penalties is joint and several.  And, if you squint, the text of §6015(f) appears to allow relief from any joint and several liability.  Today we learn not to squint. Section 6015(f) provides relief only from joint liability for income taxes.  Trust Fund Recovery Penalties are not income taxes.  So no spousal relief for §6672 penalties.  You will find a bit more (but not much) below the fold.  It’s a short lesson for a hot summer day.

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July 25, 2022 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (2)