Paul L. Caron
Dean




Sunday, January 10, 2021

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 #491 among 15,657 tax papers in all-time downloads:

  1. SSRN Logo (2018) [878 Downloads]  A Simple Regulatory Fix for Citizenship Taxation, by John Richardson, Laura Snyder & Karen Alpert (Queensland)
  2. [411 Downloads]  Tax Treaty Negotiations: Myth and Reality, by Yariv Brauner (Florida)
  3. [291 Downloads]  Is It Time to Eliminate Federal Corporate Income Taxes?, by Edward Lane (Albany) & Randall Wray (UMKC)
  4. [237 Downloads]  Assessing the Flaws in the 1920s Compromise in the Times of the Burgeoning Digital Economy and the Great Lockdown, by Craig Elliffe (Auckland)
  5. [202 Downloads]  What May We Expect of a Theory of International Tax Justice?, by Dirk Broekhuijsen (Leiden) & Henk Vording (Leiden)

January 10, 2021 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink

Saturday, January 9, 2021

This Week's Ten Most Popular TaxProf Blog Posts

AALS Hosts Virtual Panel Today On New Voices In Taxation

The AALS Tax Section hosts a Zoom panel today on New Voices in Taxation at 4:15 pm ET:

AALS (2018)This program gives junior tax scholars an opportunity to receive useful feedback on their work from senior reviewers before submitting the work for publication.

Kathleen DeLaney Thomas (North Carolina) (moderator)

Jeremy Bearer-Friend (George Washington), Taxation and the Law-and-Political-Economy Project (with Ari Glogower (Ohio State), Ariel Jurow Kleiman (San Diego) & Clinton Wallace (South Carolina)
Commentator:  Ajay Mehrotra (American Bar Foundation & Northwestern)

Jonathan Choi (Minnesota), Legal Analysis, Policy Analysis, and the Price of Deference: An Empirical Study of Mayo and Chevron
Commentator, Leigh Osofsky (North Carolina)

Hayes Holderness (Richmond), Insidious Regulatory Taxes
Commentator:  Beth Colgan (UCLA)

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January 9, 2021 in Conferences, Legal Education, Tax, Tax Conferences, Tax Scholarship | Permalink

McLaughlin: Conservation Easements And Federal Tax Law

Nancy A. McLaughlin (Utah), Trying Times: Conservation Easements and Federal Tax Law (207 pages):

Since 2005, the courts have decided more than 90 cases involving challenges to deductions claimed with respect to conservation easement donations. More than 135 opinions have been issued in these cases due to appeals, motions for reconsideration, and the issuance of separate opinions addressing specific issues. This outline, which is updated annually, discusses the case law and other developments in the conservation easement donation context.

January 9, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

Friday, January 8, 2021

Weekly SSRN Tax Article Review And Roundup: Kleiman Reviews Hayashi's Dynamic Property Taxes And Racial Gentrification

This week, Ariel Jurow Kleiman (San Diego) reviews a new work by Andrew T. Hayashi (UVA), Dynamic Property Taxes and Racial Gentrification (2020).

Stevenson

Four decades after California’s Prop 13 and the Tax Revolt it instigated, we are still unraveling the downstream consequences of property tax limits. Andrew Hayashi explores yet another unanticipated, if not surprising, consequence of property tax assessment limits in the context of gentrification. Combining theoretical reasoning with empirical data from Maryland, his approach is thoughtful and nuanced, reflecting the multilayered complexity underlying the economic and social processes at play.

The crux of his reasoning is the following. Property taxes are based on a property’s assessed value, which often differs from its market value. A relatively lower assessed value means a lower “effective tax rate” (ETR), since the ETR is measured against market value. Tax limits play an important role by limiting the government’s ability to assess properties at their market value, either imposing a maximum increase percentage or requiring that increases be phased-in over time. Regardless of the form, these limits cause lower ETRs for properties that are increasing in value compared to properties with stable or declining values. The more rapid the appreciation, the more pronounced the ETR gap.

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January 8, 2021 in Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Tax Policy In The Trump Administration

ABA Tax Section Women's Tax Forum Hosts Zoom Tea Today With Alice Abreu

The ABA Tax Section Women's Tax Forum is hosting a Zoom Tea today with Alice Abreu (Temple) at 4:30 PM ET:

ABA Tax Section Women in TaxTake a 30-minute tea break with us as we chat on Zoom video with leading women tax lawyers from a variety of fields who share stories of success and struggle as we explore individual paths to professional and personal fulfillment.

We're thrilled to announce Alice Abreu is joining us this Friday! Alice is a Professor of Law at Temple University's Beasley School of Law, where she teaches courses in Taxation, Corporate Taxation, International Taxation, and Low Income Taxpayer Policy and Practice and is serving as the inaugural Director of Temple's Center for Tax Law and Public Policy.

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January 8, 2021 in ABA Tax Section, Legal Education, Tax | Permalink

AALS Hosts Virtual Panel Today On Tax Law In An Age Of COVID

The AALS Tax Section hosts a Zoom panel today on Tax Law in an Age of COVID at 1:15 pm ET:

AALS (2018)In the wake of COVID-19, Congress rushed to use the tax policy and the administrative resources of the IRS to deliver economic benefits to individuals and firms, but it also used this must-pass legislation to enact long-sought tax measures. This panel will consider federal tax policy's role in this unprecedented economic contraction and in the fiscal crisis confronting state and local governments.

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January 8, 2021 in Conferences, Legal Education, Tax, Tax Conferences | Permalink

Field: Allocating Tax Transition Risk

Heather Field (UC-Hastings), Allocating Tax Transition Risk, 73 Tax L. Rev. ___ (2020):

NYU Law (2016)The enactment of sweeping tax changes in late 2017 by Republicans without any bipartisan support and the calls by Democrats to reverse those changes (and make more) when they regain political power create an unstable tax landscape that is challenging for taxpayers who are trying to make economic decisions that are affected by tax law. One strategy for grappling with this instability and uncertainty is for taxpayers to use contracts to allocate the economic benefits and burdens of a possible future tax law change among themselves. The literature says almost nothing about this contract-based strategy for managing tax transition risk. This gap is surprising because (a) the leading view on tax transition policy argues that taxpayers should account for the risk of tax law changes the same way they take other market risks into account when making decisions, and (b) private contracting is a well-accepted method for addressing market risks. To fill this gap, this Article uses four case studies—involving derivatives, credit agreements, municipal bonds, and merger agreements—to demonstrate that taxpayers are using tax transition risk-shifting contracts and to illustrate how this risk-management strategy varies. This Article then discusses three implications of this study.

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January 8, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

Thursday, January 7, 2021

Joe Biden's Tax Fairness Mandate

Americans for Tax Fairness, Biden’s Tax Fairness Mandate:

Biden put forth the most progressive tax reform plan ever introduced by a major party candidate for president.

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January 7, 2021 in Tax, Tax News | Permalink

Cui: Taxpayer Self-Inspections, Audits, And Optimal Tax Administration In China

Wei Cui (British Columbia), Taxpayer Self-Inspections, Audits, and Optimal Tax Administration: Evidence from China:

I document an important tax collection practice that is previously unknown to research on tax administration: mandatory taxpayer self-inspections. The practice emerged spontaneously across China in the 1990s and persists to this day despite having no basis in law. If taxpayers report additional liabilities after self-inspections, no penalties are imposed. Unlike tax amnesties, self-inspections are (i) backed up by the threat of government inspections with a significantly higher-than-normal audit probability, and (ii) used as a basic, routine revenue-generation technique. I show that self-inspections represent roughly 50% of the activity in China’s “tax inspection” (jicha) system and assume even greater importance in the larger “revenue management” (shuiyuan guanli) system. Evidence suggests that self-inspections are much more effective at generating revenue than costlier government inspections.

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January 7, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

Tax Prof AALS Teachers Of The Year

AALS, Teachers of the Year:

AALS (2018)AALS Teachers of the Year are exceptional faculty members nominated by their peers for their excellence in teaching and contributions to their law schools.

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January 7, 2021 in Legal Education, Tax, Teaching | Permalink

The Left Wants A Philanthropy Of The Few

Wall Street Journal op-ed:  The Left Wants a Philanthropy of the Few, by Elise Westhoff (President & CEO, Philanthropy Roundtable):

Initiative To Accelerate It takes a fine sense of irony to start the season of giving by trying to limit Americans’ generosity. Yet that would be the outcome of a high-profile legislative proposal unveiled on Dec. 1, “Giving Tuesday,” conceived by former hedge-fund manager John Arnold and Boston College law professor Ray Madoff. The proposal would stifle Americans who want to support worthy causes but aren’t superrich. It would also further the goals of progressive politicians who seek to punish charitable giving they don’t like and can’t control.

The “Initiative to Accelerate Charitable Giving” is framed as a way to force the wealthy to give more. It enjoys the backing of some of America’s biggest and most prominent foundations, including Ford, Kresge, Kellogg and Hewlett. These large and powerful institutions are effectively trying to dictate how smaller and less influential donors give, which dovetails neatly with the goals of progressive politicians and activists.

The centerpiece is a series of regulations on donor-advised funds, a popular option for philanthropists outside the 1%. While the foundations supporting the initiative control a combined $38 billion, the average donor-advised fund has a little more than $166,000 set aside for charity. Donor-advised funds allow individuals to donate as much as they like annually, even a few hundred dollars. Some choose to give right away, while others take a long-term approach, waiting to align their priorities with the needs of the communities they aim to serve. These funds also provide donors with the option of privacy—the particular focus of political attack.

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January 7, 2021 in Tax, Tax News | Permalink

Wednesday, January 6, 2021

Schaffa: The Economic Efficiency Case Against Business Tax Privacy

Daniel Schaffa (Richmond), The Economic Efficiency Case Against Business Tax Privacy, 50 Seton Hall L. Rev. 27 (2019):

By statute, business tax returns are not publicly available. But with public access, investors would acquire useful information that would help them make better investing decisions; business tax compliance and planning would become more uniform, preventing tax-savvy firms from gaining an advantage over other relatively more productive firms; and businesses could learn from one another, which would spare firms the cost of redundantly developing the same tax strategies. In the long run, these efficiency gains could result in lower prices, higher wages, more innovation, more leisure, and better investment returns. In the debate over business tax privacy, these sorts of economic efficiency arguments have received surprisingly little attention. This Article argues that economic efficiency is central to the debate and may well change where we come out on business tax privacy.

Conclusion
Economic efficiency is paramount to tax policy, but on one important issue—whether businesses should be entitled to tax privacy—the efficiency criterion has received short shrift. This Article evaluates business tax privacy using the same efficiency criteria applied to other tax issues and argues that eliminating business tax privacy would be beneficial. Public access to business tax returns was a feature of the country’s first corporate tax legislation. Economic efficiency considerations commend a return to our original approach.

January 6, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

Brooks: The Tax Treatment Of Student Loan Discharge And Cancellation

John R. Brooks (Georgetown), The Tax Treatment of Student Loan Discharge and Cancellation:

The standard view is that, absent an express exclusion in the tax code, cancellation of student debt is taxable. Under this view, any immediate debt relief through administrative action would generate a tax bill. More troubling, the millions of borrowers in Income-Driven Repayment could face a “tax bomb” because of their promised loan cancellation, potentially hitting borrowers with bills for $100,000 or more in the same year that the government tells them their loan obligations have ended. These perverse outcomes are, however, based on a misreading of the tax law. The standard tax treatment of debt cancellation does not work with student loans, for three principal reasons.

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January 6, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

The 10 Most Popular Tax Articles Of 2020

  1. SSRN Logo (2018)2791 Downloads:  Hiba Hafiz, Shu-Yi Oei, Diane Ring & Natalya Shnitser (Boston College), Regulating In A Pandemic: Evaluating Economic And Financial Policy Responses To The Coronavirus Crisis (reviewed by Michelle Layser (Illinois))
  2. 1,588 Downloads:  Lily Batchelder (NYU) & David Kamin (NYU), Taxing the Rich: Issues and Options
  3. 1,339 Downloads:  Ruth Mason (Virginia), The Transformation of International Tax, 114 Am. J. Int'l L. 353 (2020) (reviewed by Shu-Yi Oei (Boston College); symposium responses by Wolfgang Alschner (Ottawa), Reuven Avi-Yonah (Michigan), Wei Cui (British Columbia), Lilian Faulhaber (Georgetown), and Alan Sykes (Stanford))
  4. 822 Downloads:  John Richardson, Laura Snyder & Karen Alpert (Queensland), A Simple Regulatory Fix for Citizenship Taxation, 169 Tax Notes Fed. 275 (Oct. 12, 2020)
  5. 709 Downloads:  Ruth Mason (Virginia) & Leopoldo Parada (Leeds), The Legality of Digital Taxes in Europe, 40 Va. Tax Rev. ___ (2020)
  6. 681 Downloads:  Wei Cui (British Columbia), The Digital Services Tax: A Conceptual Defense, 73 Tax L. Reb. 69 (2019) (reviewed by Young Ran (Christine) Kim (Utah) and Kim Brooks (Dalhousie)) 
  7. 673 Downloads:    Kimberly Clausing (UCLA), Emmanuel Saez (UC-Berkely) & Gabriel Zucman (UC-Berkeley), Ending Corporate Tax Avoidance and Tax Competition: A Plan to Collect the Tax Deficit of Multinationals
  8. 669 Downloads:  Kimberly Clausing (UCLA), Profit Shifting Before and After the Tax Cuts and Jobs Act
  9. 528 Downloads:  Jennifer Blouin (Penn) & Leslie Robinson (Dartmouth), Double Counting Accounting: How Much Profit of Multinational Enterprises Is Really in Tax Havens?
  10. 521 Downloads:  Stephen Daly (King's College London) & Ruth Mason (Virginia), State Aid: The General Court Decision in Apple (reviewed by Young Ran (Christine) Kim (Utah))

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January 6, 2021 in Scholarship, Tax, Tax Prof Rankings, Tax Rankings, Tax Scholarship | Permalink

The Top 10 Tax Posts Of 2020

TaxProf Blog 2020 Traffic Data

2020 was TaxProf Blog's biggest year to-date, with 22.3 million pages views, a 15.2% increase over last year (and a 33.4% increase in new users):

TrafficMy top demographic is ages 25-34:

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January 6, 2021 in Legal Education, Tax | Permalink

Tuesday, January 5, 2021

Rosenzweig Reviews Next Steps In International Taxation’s Information Revolution By Oei & Ring


Adam Rosenzweig (Washington U.), Big Data and Small Politics: What Is the Future of International Tax Law? (JOTWELL) (reviewing Shu-Yi Oei (Boston College) & Diane Ring (Boston College), When Data Comes Home: Next Steps in International Taxation’s Information Revolution, 64 McGill L. Rev. 707 (2019)):

Jotwell (Tax) (2016)In my experience, the hallmark of a good article is that, after struggling through a few close reads, I eventually (at times somewhat begrudgingly) conclude I learned something new and valuable.  The hallmark of a great article, on the other hand, is when I reach the same conclusion but after a single, almost effortless feeling, read. The difference is a precision and clarity in writing, structure, and organization that only the confidence instilled from a deep understanding of a subject affords.  Yet at the same time a small part thinks to myself — “it seems so obvious, why didn’t I think of it?”  But of course, to paraphrase a famous movie line, “if I really had come up with the idea, then I would have written it.” But, as I eventually admit to myself, I didn’t.

Such was my experience reading When Data Comes Home: Next Steps in International Taxation’s Information Revolution (“When Data Comes Home”) by Shu-Yi Oei and Diane Ring. Oei and Ring are frequent co-authors, writing on subjects ranging from taxation of the sharing economy like Uber and AirBnB, to the role of large scale financial information leaks like the Panama Papers, to the impact of the Tax Cuts and Jobs Act on reshaping the workplace environment. I mention this only to emphasize what emerges as the particular strength of Oei and Ring’s collaborations — they combine backgrounds and methodologies and apply them to areas of common interest to uncover patterns or trends that otherwise might remain hidden. When Data Comes Home represents another successful example.

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January 5, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

Tax Policy For The Common Good

Jonathan Hannah (Notre Dame), A Tax Policy for the Common Good: Renew the CARES Act’s Charitable Tax Deduction Permanently:

I have had the pleasure of teaching an experiential learning course, Philanthropy and the Common Good, over the past two years at the University of Notre Dame within our political science department and public service minor. Through the course, undergraduates read about the common good from various perspectives, visit local nonprofits, and even award real grants to deserving organizations that serve our greater South Bend community. Teaching a course like this is a joy and truly inspiring. What it has taught me above all is that young people want to give their time, talent, and money to help make society better and foster human flourishing.

Our laws and tax policies should encourage that kind of behavior, yet I fear that they may end up doing the opposite.

With a new administration coming soon, we can expect the typical federal tax policy changes that will come with it. Many taxpayers and policy experts get interested primarily in changes to tax brackets and itemized deductions. However, there is a minor change in federal tax policy under the CARES Act that rightly expands the benefit of charitable giving to taxpayers in all brackets, including those—usually the less wealthy—who do not itemize deductions. ...

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January 5, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

Choi: An Empirical Study Of Mayo And Chevron

Jonathan Choi (Minnesota), Legal Analysis, Policy Analysis, and the Price of Deference: An Empirical Study of Mayo and Chevron, 38 Yale J. on Reg. ___ (2020):

A huge literature contemplates the theoretical relationship between judicial deference and agency rulemaking. But surprisingly little empirical work has studied the actual effect of deference on how agencies draft regulations. As a result, some of the most important questions surrounding deference—whether it encourages agencies to focus on policy analysis instead of legal analysis, its relationship to procedures like notice and comment—have so far been dominated by conjecture and anecdote.

Because Chevron applied simultaneously across agencies, it has been difficult to separate its specific causal effect from other contemporaneous events, like the rise of cost-benefit analysis and the new textualism. This Article contends with this problem by exploiting a unique event in administrative law: the Supreme Court’s 2011 decision in Mayo, which required that courts apply Chevron deference to interpretative tax regulations. By altering the deference regime applicable to one specific category of regulation, Mayo created a natural experiment with a treatment group (interpretative tax regulations) and a control group (all other regulations).

This Article uses natural language processing and various statistical methods to evaluate the causal effect of Chevron deference.

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January 5, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

IRS Whistleblower Awards Fall 28% (On Top Of 61% Decline Last Year)

Monday, January 4, 2021

Columbia Journal Of Tax Law Publishes New Issue

The Columbia Journal of Tax Law has published Vol. 12, No. 1 (Winter 2020):

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January 4, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

Tax Attorneys Will Be In High Demand In 2021

American Lawyer, 2021 Forecast: Tax Attorneys Will Be in High Demand Thanks to the Pandemic and a New President:

Big Law tax practice leaders expect an even busier year for tax lawyers in 2021, with corporate clients still working through the sweeping changes from the Trump administration’s 2017 tax reform legislation.

What’s more, the economic impact of the COVID-19 pandemic is forcing cash-strapped states to seek new revenue sources, including tax increases, while federal and state tax authorities are stepping up enforcement. That will mean more work for corporate tax lawyers, whether they handle tax planning, controversy and litigation, or merger and acquisition deals.

Under the Biden administration, tax practice leaders expect that congressional gridlock will block any major federal tax legislation to counteract the Trump administration’s 2017 Tax Cuts and Jobs Act.

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January 4, 2021 in Tax, Tax News | Permalink

Subscribing To TaxProf Blog

SubscribeWe offer three ways to have TaxProf Blog content automatically delivered to your computer, tablet, or smart phone:

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January 4, 2021 in About This Blog, Legal Education, Tax | Permalink

Avi-Yonah & Mazzoni: Coca-Cola: A Decisive IRS Transfer Pricing Victory

Reuven S. Avi-Yonah (Michigan) & Gianluca Mazzoni (S.J.D. (International Tax) 2020, Michigan), Coca-Cola: A Decisive IRS Transfer Pricing Victory, At Last, 169 Tax Notes Fed. 1739 (Dec. 14, 2020):

Tax Notes Federal (2020)Coca-Cola [Coca-Cola Co. v. Commissioner, 155 T.C. No. 10 (Nov. 18, 2020)] is the first decisive IRS victory in a major transfer pricing case since 1979. If not reversed on appeal, the outcome will mark an important shift in U.S. transfer pricing litigation and perhaps indicate that the IRS could win other major pending cases, such as the one against Facebook.

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January 4, 2021 in Scholarship, Tax, Tax Analysts, Tax Scholarship | Permalink

Support TaxProf Blog By Shopping On Amazon

Amazon-associatesTaxProf Blog participates in the amazon.com affiliate program. You can help support TaxProf Blog at no cost to you by making purchases through Amazon links on the blog and through the search box in the right column of the blog:

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January 4, 2021 in About This Blog, Legal Education, Tax | Permalink

TaxProf Blog Holiday Weekend Roundup

Sunday, January 3, 2021

L.A. Times: California Assesses Retroactive Tax Against Small Businesses Rather Than Amazon

Los Angeles Times editorial, California Is Clobbering Small Businesses With a Retroactive Tax Grab:

Fulfillment By AmazonFor about two years, advocates of small business say, the [California Department of Tax and Fee Administration] has been dunning out-of-state retailers that sold through Amazon’s marketplace prior to 2019, when Amazon started collecting sales taxes on those transactions — and seeking to collect taxes on sales from as far back as 2012. A trade association for those sellers has sued, accusing the agency of an unconstitutional overreach and unlawful discrimination.

The CDTFA’s mission is important, overseeing taxes that support schools, public safety and other essential services. And out-of-state online sellers that don’t collect sales taxes have an unfair advantage over in-state stores that do. That’s why state lawmakers around the country sought for years to force Amazon and other online retailers to collect sales taxes, ultimately leading the Supreme Court in 2018 to overturn decades-old precedents and let states require companies outside their borders to collect and remit taxes on sales to people inside their borders.

California did so through a law enacted in 2019. But the CDTFA argues that retailers that relied on Amazon to store and ship their goods are liable for taxes even before then, dating back to the first day any of their products were stored by Amazon in a California warehouse — even though Amazon is managing the entire process through its “Fulfillment by Amazon” program.

In its lawsuit, the Online Merchants Guild argues that the duty to collect those taxes should have fallen on Amazon, which acts as a virtual consignment store and should have been treated that way. But state tax officials gave the company a pass from 2012 to 2019, creating a hole that the CDTFA is trying to fill by retroactively taxing companies like Lollipop Seeds. ...

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January 3, 2021 in Tax, Tax News | Permalink

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 #510 among 15,644 tax papers in all-time downloads:

  1. SSRN Logo (2018) [846 Downloads]  A Simple Regulatory Fix for Citizenship Taxation, by John Richardson, Laura Snyder & Karen Alpert (Queensland)
  2. [383 Downloads]  Tax Treaty Negotiations: Myth and Reality, by Yariv Brauner (Florida)
  3. [282 Downloads]  Is It Time to Eliminate Federal Corporate Income Taxes?, by Edward Lane (Albany) & Randall Wray (UMKC)
  4. [268 Downloads]  Rethinking The Estate Planning Curriculum, by Jeffrey Cooper (Quinnipiac)
  5. [221 Downloads]  Assessing the Flaws in the 1920s Compromise in the Times of the Burgeoning Digital Economy and the Great Lockdown, by Craig Elliffe (Auckland)

January 3, 2021 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink

Saturday, January 2, 2021

This Week's Ten Most Popular TaxProf Blog Posts

Facebook, The IRS, And The Commensurate With Income Standard

Stephen L. Curtis (Cross Border Analytics), Facebook, the IRS, and the Commensurate With Income Standard, 169 Tax Notes Fed. 1921 (Dec. 21, 2020):

Tax Notes Federal (2020)In ongoing transfer pricing litigation, Facebook is challenging the IRS’s adjustment of a buy-in payment under a cost-sharing arrangement (CSA) with an Irish affiliate. The IRS stated that the adjustment was necessary to ensure compliance with the commensurate with income (CWI) standard added to section 482 by the Tax Reform Act of 1986. It is unclear, however, whether the IRS has performed a reg. section 1.482-7(i)(6) periodic adjustment calculation in this case — either before issuing its initial proposed adjustment in 2016 or before its more recently revised adjustment in October 2019.

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January 2, 2021 in Scholarship, Tax, Tax Analysts, Tax Scholarship | Permalink

Friday, January 1, 2021

Tax Policy In The Trump Administration

Home For The Holidays

January 1, 2021 in Legal Education, Tax | Permalink

The First Sunrise Of 2021

The first sunrise of 2021 in Malibu.
This is the [year] the Lord has made; let us rejoice and be glad in it.
Psalm 118:24

Sunrise 2

January 1, 2021 in Legal Education, Tax | Permalink

My New Year's Wish For 2021

This was my final time in my office in 2020:

Office 2020

My New Year's wish for 2021 is that I get to spend much more time in my office in 2021 (without my mask, but with my dog).

January 1, 2021 in Legal Education, Pepperdine Legal Ed, Tax | Permalink

Thursday, December 31, 2020

Amarante: Unregulated Charity

Eric Franklin Amarante (Tennessee), Unregulated Charity, 94 Wash. L. Rev. 1503 (2019):

The vast majority of charities in the United States operate in a regulatory blind spot: they are neither meaningfully evaluated when they apply for charitable status nor substantively monitored after they receive charitable status. Driven by severe budget constraints, the IRS decided to essentially ignore any charity that claims it will realize less than $50,000 in annual gross receipts. From a practical perspective, the IRS’s decision makes sense. To the extent smaller charities are less likely to cause harm, it is reasonable (perhaps even preferable) to subject them to less scrutiny. This type of prioritization, known as risk-based regulation, has become increasingly popular as regulatory budgets have continued to shrink. But however intuitive, reasonable, or widespread risk-based regulation may seem, the fact remains that the IRS has effectively absolved itself of its duty to oversee the majority of charities.

This Article explores, on both a micro- and macro-level, the negative consequences of the IRS’s decision to leave smaller charities unregulated.

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December 31, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Why States Should Consider Expanding Sales Taxes To Services, Part 2

Gladriel Shobe (BYU), Grace Stephenson Nielsen (J.D. 2021, BYU), Darien Shanske (UC-Davis) & David Gamage (Indiana), Why States Should Consider Expanding Sales Taxes to Services, Part 2, 99 Tax Notes State 4 (Jan. 4, 2021):

Tax Notes StateAs we explained in our prior essay, state governments are experiencing severe revenue needs because of COVID-19, and expanding state sales tax bases to include services is a promising option for state governments to manage their budget shortfalls. In this, the second essay in this series — a contribution to Project SAFE: State Action in Fiscal Emergencies — we explain some of the implementation details and options for how states might go about expanding their sales tax bases to include services. In particular, we argue that there are some incremental steps that seem to be technically and politically feasible as responses to the current crisis. In particular, we argue the states should start by expanding their sales taxes to include services that are least problematic as a matter of policy and politics.

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December 31, 2020 in Scholarship, Tax, Tax Analysts, Tax Scholarship | Permalink | Comments (3)

Wednesday, December 30, 2020

McCaffery: The Death Of The Income Tax

Edward J. McCaffery (USC), The Death of the Income Tax (or, The Rise of America’s Universal Wage Tax), 95 Ind. L.J. 1233 (2020):

Recent proposals from Alexandria Ocasio-Cortez (D NY) to raise the top marginal tax rates under the income tax, and from Senator Elizabeth Warren (D Mass), to add a stand-alone wealth tax to the existing mix of taxes, are promising beginnings. They have burst forth from a veritable desert of progressive tax alternatives in the public political discussion. But both sets of ideas suffer from an allegiance to the status quo; both operate within the existing paradigm of nominally attempting to tax “income” and “wealth” — wealth transfers, in the case of the status quo, wealth itself, in the case of Warren’s proposal. This Article examines that status quo to show that the “income” tax is dead, replaced by a universal wage tax in which payroll taxes add on to a wage/income tax to highly, and inescapably, burden labor while wealth is left off the hook of taxation altogether.

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December 30, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (6)

Hasen: How Should Gifts Be Treated Under The Federal Income Tax?

David Hasen (Florida), How Should Gifts Be Treated Under the Federal Income Tax?, 2018 Mich. St. L. Rev. 81 (reviewed by Ari Glogower (Ohio State) here):

No consensus exists regarding the proper income tax treatment of gifts. Some commentators believe the tax should fall on the donor only; others believe it should fall on the donee only; and still others believe it should fall on both the donor and the donee.

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December 30, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Tuesday, December 29, 2020

Scott Galloway's Secret To Success: Don't Follow Your Passion. Become A Tax Lawyer.

Scott Galloway (NYU):

The worst advice given to young people is ... follow your passion. What utter bull****. If someone tells you to follow your passion, that means they're already rich. ...

Nobody grows up thinking I'm passionate about tax law. But the best tax lawyers in this nation fly private and have a much broader selection of mates than they deserve. And they get to do interesting things which, by the way, makes them passionate about tax law.

Prof. Galloway Career Advice:

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December 29, 2020 in Legal Education, Tax | Permalink | Comments (3)

Tax Prom 2020

Tax Prom 2020: A Tribute to Congressional Staff:

Every year, for over 80 years, the Tax Foundation has hosted its end-of-year gala, Tax Prom, to bring together the tax community in a spirit of bipartisanship and to celebrate the hard work of the year.

In 2020, like so many other things, Tax Prom was a little different. Instead of gathering in person, we brought the celebration online and dedicated the evening to a very special group of people—Congressional Staff, the unsung heroes in Congress.

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December 29, 2020 in Tax, Tax News | Permalink | Comments (0)

Monday, December 28, 2020

Michele Bachmann, Former Congresswoman, Presidential Candidate, And IRS Tax Lawyer, Named Dean At Regent

Regent University Names Michele Bachmann as Dean of the Robertson School of Government:

Bachmann (2020)Regent University and its Board of Trustees have named U.S. Congresswoman Michele Bachmann as the new dean of the Robertson School of Government, effective January 1, 2021. Dr. M. G. “Pat” Robertson, Founder, Chancellor & CEO of Regent University, made the announcement today.

“Congresswoman Michele Bachmann is a distinguished leader of national and global reputation,” said Robertson. “She has displayed exemplary vision, character, integrity, and skill throughout her career in government. We are delighted to welcome to Regent this remarkable public servant whose vast experience and principled leadership will provide an extraordinary role model for our students and graduates to emulate.”

“On behalf of the Regent University Board of Trustees, I welcome Michele Bachmann to Regent University’s Robertson School of Government,” said Phil Walker, Chairman of the Board at Regent University. “Her service to our great nation is an inspiration to us all. I know that the Regent community will greatly benefit from her outstanding leadership.”

Michele Bachmann was born in Waterloo, Iowa. She received a B.A. in Political Science and English from Winona State University in 1978. She married Marcus Bachmann, a clinical therapist who holds a master’s degree from Regent University. In 1986, Bachmann received a Juris Doctor degree from Oral Roberts University. She was a member of the ORU law school’s final graduating class, and was part of a group of faculty, staff, and students who moved the ORU law school library to Regent University. Two years later, she completed a Master of Law in taxation at the College of William & Mary. She worked for four years as a lawyer for the Internal Revenue Service’s Office of Chief Counsel in St. Paul, Minnesota.

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December 28, 2020 in Legal Education, Tax | Permalink | Comments (1)

TaxProf Blog Holiday Weekend Roundup

Sunday, December 27, 2020

WaPo Op-Ed: The Defiant Hope Of Christmas — God Is With Us

Washington Post op-ed:  The Defiant Hope of Christmas: God Is With Us, by Michael Gerson (co-author, City of Man: Religion and Politics in a New Era):

One of the stranger elements of the strange Nativity narrative is the way an angel addresses Mary: “You who are highly favored.” As a teen mother, pregnant before marriage and destined to give birth among barn animals, she might have been forgiven for regarding this as angelic sarcasm. Fast forward three decades, and the most favored one will see her son executed among thieves before a jeering crowd.

The whole Christmas story is pregnant with enigma and violated expectations. The Creator pulls on a garment of blood and bone. Almighty God is somehow present in a fragile newborn. The deliverer of humankind is delivered, slimy with vernix, in a place smelling of dung. If God can come here, amid the shame and straw, he can come anywhere. If God came here, he has come everywhere. ...

Many in first-century Palestine — as in every time since — were looking for political deliverance. They had every right to resent the brutal rule of Rome and its proxies. But the Christmas story overturns that expectation. It asserts that the most important things — the things that last and count — are not political or social but personal and human. Instead of influence based on coercion, the birth of Jesus points to a power found in vulnerability, service and humility. Humankind is offered not a new way of organizing society but a new way of being human, marked by compassion, purpose, dignity and kindness. ...

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December 27, 2020 in Legal Education, Tax | Permalink | Comments (0)

NY Times Op-Ed: The Forgotten Radicalism Of Jesus Christ

New York Times op-ed:  The Forgotten Radicalism of Jesus Christ, by Peter Wehner (Senior Fellow, Ethics and Public Policy Center; co-author, City of Man: Religion and Politics in a New Era):

First-century Christians weren’t prepared for what a truly radical and radically inclusive figure Jesus was, and neither are today’s Christians. We want to tame and domesticate who he was, but Jesus’ life and ministry don’t really allow for it. He shattered barrier after barrier. ...

For Christians, the incarnation is a story of God, in the person of Jesus, participating in the human drama. And in that drama Jesus was most drawn to the forsaken and despised, the marginalized, those who had stumbled and fallen. He was beloved by them, even as he was targeted and eventually killed by the politically and religiously powerful, who viewed Jesus as a grave threat to their dominance.

Over the course of my faith journey, I have wondered: Why was a hallmark of Jesus’s ministry intimacy with and the inclusion of the unwanted and the outcast, men and women living in the shadow of society, more likely to be dismissed than noticed, more likely to be mocked than revered?

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December 27, 2020 in Legal Education, Tax | Permalink | Comments (0)

Baptist Seminary Presidents Declare Critical Race Theory Is Incompatible With The Bible; Several Black Pastors Break Away From Southern Baptist Convention

Critical Race Theory Cross

Baptist Press, Seminary Presidents Reaffirm BFM, Declare CRT Incompatible:

On this twentieth anniversary year of the Baptist Faith & Message (as revised and adopted by the Southern Baptist Convention in 2000), the Council of Seminary Presidents of the Southern Baptist Convention, meeting in its annual session, hereby reaffirms with eagerness the Baptist Faith & Message as the doctrinal statement that unites and defines Southern Baptist cooperation and establishes the confessional unity of our Convention. Our six seminaries are confessional institutions, standing together in this classic statement of biblical truth. All professors must agree to teach in accordance with and not contrary to the Baptist Faith & Message. This is our sacred commitment and privilege, and every individual faculty member and trustee of our institutions shares this commitment. We are thankful for the theological commitments of the Southern Baptist Convention, standing against the tide of theological compromise and in the face of an increasingly hostile secular culture.

In light of current conversations in the Southern Baptist Convention, we stand together on historic Southern Baptist condemnations of racism in any form and we also declare that affirmation of Critical Race Theory, Intersectionality, and any version of Critical Theory is incompatible with the Baptist Faith & Message.

Christianity Today, Two Prominent Pastors Break With SBC After Critical Race Theory Statement:

The leaders of two majority-black megachurches in major cities announced this week that they will no longer affiliate with the Southern Baptist Convention.

In op-eds announcing their decisions to leave, Charlie Dates of Chicago’s Progressive Baptist Church and Ralph D. West of Houston’s The Church Without Walls both criticized SBC seminary presidents’ declaration that critical race theory was “incompatible” with the denomination’s statement of faith.

The two pastors brought up recognizing the reality of systemic racism alongside the truth and authority of Scripture. ...

Some worry that a systemic view of racism, where a person is considered privileged or disadvantaged in society because of their race, conflicts with Christian beliefs about forgiveness or people holding equal value before God.

Washington Post, Several Black Pastors Break With the Southern Baptist Convention Over a Statement on Race:

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December 27, 2020 in Legal Education, Tax | Permalink | Comments (2)

The Top Five New Tax Papers

There is quite a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a paper returning to the list at #4 and a new paper joining the list at #5:

  1. SSRN Logo (2018) [817 Downloads]  A Simple Regulatory Fix for Citizenship Taxation, by John Richardson, Laura Snyder & Karen Alpert (Queensland)
  2. [317 Downloads]  Tax Treaty Negotiations: Myth and Reality, by Yariv Brauner (Florida)
  3. [275 Downloads]  Is It Time to Eliminate Federal Corporate Income Taxes?, by Edward Lane (Albany) & Randall Wray (UMKC)
  4. [262 Downloads]  Rethinking The Estate Planning Curriculum, by Jeffrey Cooper (Quinnipiac)
  5. [208 Downloads]  Assessing the Flaws in the 1920s Compromise in the Times of the Burgeoning Digital Economy and the Great Lockdown, by Craig Elliffe (Auckland)

December 27, 2020 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink | Comments (0)

Saturday, December 26, 2020

This Week's Ten Most Popular TaxProf Blog Posts

Tax Policy In The Trump Administration