Paul L. Caron
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Tuesday, June 14, 2022

Choi: Beyond Purposivism In Tax Law

Jonathan H. Choi (Minnesota; Google Scholar), Beyond Purposivism in Tax Law, 107 Iowa L. Rev. 1439 (2022):

Iowa Law Review 2 (2022)Conventional wisdom holds that purposivist theories of statutory interpretation solve the problem of tax shelters, because shelters comply with the text but not the purpose of tax statutes. But the predominant form of purposivism in tax scholarship, which combines specific statutory purposes with general structural principles of tax law, cannot separate shelters from ordinary tax planning. Although tax shelters claim benefits that exceed specific purposes and do not align with objective general principles, so do some widely accepted tax strategies.

This Article therefore proposes a new framework to go beyond purposivism in tax law, complementing purposivist techniques with pragmatism or doctrinalism. Pragmatism applies explicit policy judgments when statutory purposes run out; doctrinalism applies rules, like canons of construction, that provide determinate answers when statutory purpose is ambiguous. Pragmatism generally leads to better results in any particular case, while doctrinalism provides taxpayers certainty in planning legitimate transactions.

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June 14, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Practical Considerations In Starting And Operating An Academic Low-Income Taxpayer Clinic

Amy Spivey (UC-Hastings) & Manoj Viswanathan (UC-Hastings; Google Scholar), Practical Considerations in Starting and Operating an Academic Low-Income Taxpayer Clinic, 76 Tax Law. __ (2022):

ABA Tax Lawyer (2022)Low-income taxpayer clinics (“LITCs”) provide legal assistance to underserved clients with active federal tax controversies, conduct educational outreach to low-income and English-as-a-second-language taxpayers, and work to ensure the fairness and integrity of the tax system. Despite the availability of IRS grant funding for LITCs and the alignment of LITC goals with the core values that underlie clinical legal education, a relatively small percentage of U.S. law schools currently operates an LITC. Moreover, many law school LITCs have closed within the past ten years, demonstrating that even if started, academic LITCs are challenging to sustain.

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June 14, 2022 in ABA Tax Section, Legal Ed Scholarship, Legal Education, Scholarship, Tax, Tax Scholarship | Permalink

Blue J's AI Prediction Of Result Of Tax Court Appeal Faces First Test In Federal Circuit Court

Benjamin Alarie (Osler Chair in Business Law, University of Toronto; CEO, Blue J Legal) & Christopher Yan (Senior Legal Research Associate, Blue J Legal), Disguised Distributions and Management Fees: Aspro Revisited, 175 Tax Notes Fed. 1401 (May 30, 2022):

Tax Notes Federal (2020)In this article, Alarie and Yan analyze the Eighth Circuit’s recent decision in Aspro concerning the deductibility of management fees the business paid to its shareholders.

In our Blue J Predicts column we use advances in machine learning to analyze pending or recently decided federal income tax cases. This month we follow up on the appeal of a Tax Court decision that we first examined in October 2021. In Aspro, the taxpayer challenged the IRS’s determination that the “management fees” it paid were not deductible because they were disguised corporate distributions of profits. Our initial analysis focused on the pending appeal and on April 26 the Eighth Circuit released its opinion, upholding the Tax Court’s decision. This is the first time a case we have examined in Blue J Predicts has been decided by an appellate court since we began the column in mid-2021.

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June 14, 2022 in Scholarship, Tax, Tax Analysts, Tax Scholarship | Permalink

Monday, June 13, 2022

Virginia Tax Review Publishes New Issue

Virginia Tax Review (2016)The Virginia Tax Review has published Vol. 41, No. 1 (Fall 2021):

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June 13, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Death Of John Simon (Yale)

YLS Today, Yale Law School Mourns the Loss of Professor Emeritus John G. Simon (New York Times Obituary):

SimonJohn G. Simon ’53 LL.B., the Augustus Lines Professor Emeritus of Law at Yale Law School, died on Feb. 14, 2022 at the age of 93 in Hamden, Connecticut.

“John Simon was a beloved teacher, colleague, and friend,” said Dean Heather K. Gerken. “His devotion to the School was unparalleled, he pioneered the study of nonprofits and philanthropy, and he shaped the careers of generations of students. We have lost a giant, and we mourn his loss throughout our community.”

Born Sept. 19, 1928, Simon graduated from Harvard College, where he was the president of the Harvard Crimson, before earning his law degree from Yale Law School in 1953. After law school, Simon served in both military and civilian capacities in the Office of General Counsel, Office of the Secretary of the Army, and practiced law in New York with the firm of Paul, Weiss, Rifkind, Wharton & Garrison from 1958 to 1962.

Simon joined the Yale Law School faculty in 1962, specializing in teaching and research related to the nonprofit sector and philanthropy, as well as elementary and secondary school education. He also taught courses in contracts, aging and the law, and family law. Simon served as Deputy Dean from 1985–1990, and Acting Dean in 1991.

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June 13, 2022 in Legal Education, Obituaries, Tax | Permalink

TaxProf Blog Weekend Roundup

Sunday, June 12, 2022

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 joining the list at #5:

  1. SSRN Logo (2018) [459 Downloads]  Taxing Robots, by Rita de la Feria (Leeds; Google Scholar) & Maria Amparo Grau Ruiz (Universidad Complutense de Madrid; Google Scholar)
  2. [421 Downloads]  A Matter of High Interest: How a Quiet Change to an Actuarial Assumption Turbocharges the Life Insurance Tax Shelter, by Andrew Granato (J.D.|Ph.D., Yale; Google Scholar)
  3. [364 Downloads]  Taxation and the Knowledge Economy, by Alan Kirkpatrick (Bournemouth) & Anne Fairpo (Bournemouth)
  4. [322 Downloads]  Filing While Black: The Casual Racism Of The Tax Law, by Steven Dean (Brooklyn)
  5. [297 Downloads]  Tax Neutrality Regimes and GloBE, by Leopoldo Parada (Leeds; Google Scholar)

June 12, 2022 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink

Saturday, June 11, 2022

This Week's Ten Most Popular TaxProf Blog Posts

For 1st Time Since 2011, IRS Makes Mid-Year Adjustment In Standard Mileage Rate Due To Spike In Gas Prices; 62.5¢/Mile Is Up 11.6% From 2021

IR-2022-124, IRS Increases Mileage Rate For Remainder of 2022:

The Internal Revenue Service today announced an increase in the optional standard mileage rate for the final 6 months of 2022. Taxpayers may use the optional standard mileage rates to calculate the deductible costs of operating an automobile for business and certain other purposes.

For the final 6 months of 2022, the standard mileage rate for business travel will be 62.5 cents per mile, up 4 cents from the rate effective at the start of the year. The new rate for deductible medical or moving expenses (available for active-duty members of the military) will be 22 cents for the remainder of 2022, up 4 cents from the rate effective at the start of 2022. These new rates become effective July 1, 2022. The IRS provided legal guidance on the new rates in Announcement 2022-13, issued today.

In recognition of recent gasoline price increases, the IRS made this special adjustment for the final months of 2022. The IRS normally updates the mileage rates once a year in the fall for the next calendar year. For travel from Jan. 1 through June 30, 2022, taxpayers should use the rates set forth in Notice 2022-03.

IRS Mileage

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June 11, 2022 in IRS News, Tax, Tax News | Permalink

Friday, June 10, 2022

Weekly SSRN Tax Article Review And Roundup: Layser Reviews Appleby's State Exit Taxes

This week, Michelle Layser (Illinois; moving to San Diego; Google Scholar) reviews Andrew Appleby (Stetson; Google Scholar), No Migration Without Taxation: State Exit Taxes, 60 Harv. J. on Legis. ___ (2023).

Layser (2018)In recent years, U.S. individuals and businesses have tended to move “from cold, high-tax northern states to warm, low-tax southern and southwestern states” (CNBC). These migration patterns have accelerated during the COVID-19 pandemic, as the work environment has shifted to remote settings, and “[m]ost experts expect more people and businesses will choose to locate where they can pay lower taxes.” (CNBC). When wealthy taxpayers and large businesses leave a state, they take income with them, eroding the state’s tax base. To fight these trends, states have traditionally engaged in tax competition to attract and retain wealthy taxpayers and businesses. A large body of research, including my ownforthcoming article (Overcoming Constitutional (And Political) Barriers to State Place-Based Tax Incentive Reform, 170 U. Pa. L. Rev. ___ (2022)), focuses on how states use tax incentives to discourage out-migration and encourage in-migration. In his forthcoming article, Professor Andrew Appleby focuses on another strategy states can use to fight out-migration: exit taxes.

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June 10, 2022 in About This Blog, Scholarship, Tax, Tax Scholarship | Permalink

Tax Policy In The Biden Administration

Brown Reviews Maynard's Biden’s Gambit: Advancing Racial Equity While Relying On A Race-Neutral Tax Code

Dorothy Brown (Emory; moving to Georgetown), The Biden Administration's Racial Equity Challenges (JOTWELL) (reviewing Goldburn P. Maynard Jr. (Kelley School of Business, Indianal (Goolgle Scholar), Biden’s Gambit: Advancing Racial Equity While Relying on a Race-Neutral Tax Code, 131 Yale L.J. Forum 656 (2022)):

JOTWELL (2020)Professor Goldburn Maynard’s excellent Essay: Biden’s Gambit: Advancing Racial Equity While Relying on a Race-Neutral Tax Code, analyzes the Biden’s Administrations efforts to advance racial equity through the American Rescue Plan Act (ARPA) enacted by Congress and signed into law on March 11, 2021.

Professor Maynard wryly observes that “[w]ith courts standing in the way, [racial equity] must be promoted in a neutral, indirect way that ignores systemic discrimination.” (P. 679.) Perhaps however it is the Biden Administration that should bear some responsibility for not engaging in better fact finding to prove its legislative scheme was narrowly tailored. Nevertheless, Professor Maynard’s conclusion is more than supported by constitutional precedent. Ultimately, Professor Maynard believes what is needed is “both targeted and universal programs to tackle inequality.” (P. 686.)

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June 10, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Thursday, June 9, 2022

Hasen: Forget (Arguing About) Redistribution

David Hasen (Florida; Google Scholar), Forget (Arguing About) Redistribution, 29 Geo. J. on Poverty L. & Pol'y 41 (2021):

Reformers often argue that the benefits of ameliorating inequality are worth the cost in higher tax rates and reduced economic efficiency that redistributive social policy supposedly requires. This paper suggests that these arguments are mostly misplaced. Focusing solely on the marginal benefit of government- versus private-sector spending, there is ample reason to conclude that many governmental expenditures directed to reducing inequality are independently justifiable on the basis that they increase efficiency and, over time, more than pay for themselves. Because the efficiency argument directly addresses concerns that might otherwise counsel restraint in redistributive programs, treating the reduction of inequality as a worthwhile tradeoff against efficiency or higher tax rates is mostly counterproductive from a social policy perspective. In fact, the failure to adopt or enhance many spending programs itself represents a form of upward redistribution as measured from a baseline of social wealth maximization. This redistribution is difficult or impossible to justify from either a welfarist perspective or a libertarian one

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

Con Or Constitutional: An Analysis Of The 'Net Worth' Wealth Tax

Brian Fletcher, Con or Constitutional: An Analysis of the "Net Worth" Wealth Tax, 54 Creighton L. Rev. 87 (2020):

This Article is an in-depth analysis of the wealth tax proposals presented by former presidential candidates Bernie Sanders and Elizabeth Warren to determine if their proposals could be considered constitutional. As both plans propose a wealth tax based on “net worth,” this Article attempts to determine how a court or the tax code would most likely define this essential term for tax purposes. The proposals are then compared, in the context of United States legal history, to historically constitutional and unconstitutional federal taxes. 

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

Taxation Of Long-Term Unemployment In The Digital Economy

Limor Riza (Ono Academic College; Google Scholar), Taxation of Long-term Unemployment in the Digital Economy: Facing the Twenty-First Century Challenges, 70 Cath.U. L. Rev. 421 (2021):

The article examines the policy of taxing long-term unemployment. We claim that tax systems should not tax the unemployed regardless of whether they reenter the labor market. Unemployment is a socioeconomic problem. The fear of expanding unemployment increases due to COVID-19 that shut down large sectors of the economy for a long period and also due to the digital economy. As early as the 1930s, Keynes expressed his fear of the economic challenges his grandchildren's generation would face, coining the term "technological unemployment." Several contemporary economists substantiate this fear by showing that some occupations are bound to disappear. Unemployment insurance is part of social law aimed at granting financial security during unemployment. This article focuses on security benefits paid out of unemployment insurance programs to unemployed who become chronically so. In many countries it is common to tax unemployment benefits, but tax laws do not distinguish between short-and long-term unemployed taxpayers.

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

Wednesday, June 8, 2022

Blank: Presidential Tax Transparency

Joshua D. Blank (UC-Irvine; Google Scholar), Presidential Tax Transparency, 40 Yale L. & Pol'y Rev. 1 (2021):

Whether the public should have access to the tax returns of the President of the United States, and those who seek the office, is the focus of acute attention and debate. President Donald Trump’s refusal to disclose his tax returns throughout his campaigns and presidency has fueled multiple legislative public disclosure proposals. In March 2021, the U.S. House of Representatives passed legislation as part of the For the People Act of 2021 that would require Presidents, Vice Presidents, and nominees to publicly disclose several years of their tax returns through the Federal Election Commission. Many state legislatures have considered similar requirements for candidates who seek to appear on state primary and general election ballots. Proponents of these measures argue that public disclosure of tax returns could expose conflicts of interest, reveal the President’s and candidates’ annual tax liability and tax rates, and, most importantly, enable the public to observe whether the President or candidates have engaged in tax evasion, pursued tax shelters and other tax avoidance, and participated in audits or tax controversies with the IRS.

This Article intervenes in the disclosure debate by exploring whether, and to what extent, mandatory public disclosure of tax returns would achieve the policy objective of enabling voters to observe candidates’ and elected officials’ compliance with the tax law.

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

Estate And Gift Tax Valuation Of Cannabis Business Interests

Jonathan G. Blattmachr (Milbank), Bridget J. Crawford (Pace; Google Scholar) & Mitchell M. Gans (Hofstra), Estate and Gift Tax Valuation of Cannabis Business Interests, 161 Tr. & Est. 22 (Jan. 2022):

Approximately half of all American adults have used cannabis at some point in their lives. Whether or not any one estate planning professional falls into this particular demographic, it is crucial for all advisors understand the estate planning uncertainties and complexities facing owners of legal cannabis businesses. Eighteen states have legalized cannabis for adult recreational use; thirty-seven states have legalized the medicinal use of cannabis (often in conjunction with permitting adult recreational uses). Experts estimate that legal recreational sales in the United States were $18.9 billion in 2021 and that, by 2026, sales in the United States alone will reach $41.8 billion or more. As the legal cannabis industry expands, estate planners are more likely to have clients who own interests in legal cannabis businesses. After providing a brief introduction to the important federal banking and income tax limitations on cannabis businesses, this article turns to the more complex—and unpredictable—issue of how interests in legal cannabis businesses should be valued for estate and gift tax purposes.

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

NY Times: The Global Minimum Tax Deal Is In Trouble

New York Times, The Global Minimum Tax Deal Is In Trouble:

What economists hailed as the most ambitious tax overhaul in a century is now mired in a toxic mix of fine print and political paralysis.

It was only last fall that more than 130 nations signed on to an agreement to eliminate the world’s tax havens and enact a global minimum tax. The agreement was designed to increase taxes substantially on many large corporations and to end an international fight over how technology companies are taxed. Its architects said it would end the global “race to the bottom” for corporate tax rates.

But legislators in both the U.S. and Europe are now struggling to pass the laws needed to make good on the promises embedded in the deal. And no tax changes are likely to pass on their own, without the more politically popular spending programs also passing.

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June 8, 2022 in Tax, Tax News | Permalink

Tuesday, June 7, 2022

Bearer-Friend: Tax Without Cash

Jeremy Bearer-Friend (George Washington; Google Scholar), Tax Without Cash, 106 Minn. L. Rev. 953 (2021):

Minnesota Law Review (2021)This Article documents and evaluates tax obligations paid without cash, referred to as “in-kind tax paying.” Such forms of tax paying include paying federal income taxes by remitting a used flatbed truck to the IRS, paying local property taxes by working a few hours a month answering phones at city hall, and paying state excise taxes by conveying a proportion of all seashells farmed within a state to that state. These are not just hypotheticals, but forms of in-kind tax paying that occur in the United States throughout periods when many taxes are also paid in cash. Nevertheless, despite its long history and prevalence, in-kind tax paying has been underexplored as a viable, and potentially appealing, form of tax remittance.

By providing an original taxonomy of in-kind tax paying within a cash economy, this Article makes three contributions. 

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June 7, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Sanchirico: Should A Global Minimum Tax Be Country-By-Country?

Chris William Sanchirico (Penn; Google Scholar), Should a Global Minimum Tax be Country-by-country?

The OECD has proposed implementing a global minimum tax, and the US already has in place one version of such a regime in the form of GILTI. A key design choice in the imposition of a global minimum tax is whether the minimum should be tested on a country-by-country basis or on the basis of an MNE's global average tax rate. The consensus view appears to be that a country-by-country approach is superior because, first, it raises more revenue and, second, it is more effecting at controlling harmful tax competition. This paper challenges those assertions. It presents a simple game-theoretic analysis suggesting that a global averaging approach is superior in both respects.

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June 7, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Keith Fogg To Retire As Harvard's Tax Clinic Director

Law360, This Change Could Ease Filing Burden, Retiring Tax Prof. Says:

FoggAs Harvard tax clinic director, Fogg has seen or done most of what there is to see and do in tax law over his career. He's seen a lot of the U.S., too — he biked from California to Florida a couple of years ago while on sabbatical — and is looking forward to doing some international travel once he retires from the Harvard Federal Tax Clinic this summer.

As that date approaches, [T. Keith] Fogg took the time to speak with Law360 about his career, challenges facing the IRS and the outlook for the future of tax policy.

Prepopulating tax returns is one policy change that would help people save money and stay compliant, as tax filing can get complicated for folks who work several jobs or have multiple bank or brokerage accounts, Fogg said.

Taxpayers spend around $300 billion annually to file their tax returns, according to a recent paper from the National Bureau of Economic Research, which found that more than two-fifths of returns could be accurately prepopulated and that such a system could reduce the tax gap [Lucas Goodman (Office of Tax Analysis, U.S. Treasury Department), Katherine Lim (Federal Reserve Bank, Minneapolis), Bruce Sacerdote (Dartmouth) & Andrew Whitten (Office of Tax Analysis, U.S. Treasury Department), Automatic Tax Filing: Simulating a Pre-Populated Form 1040]. ...

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June 7, 2022 in Legal Education, Tax, Tax Prof Moves | Permalink

Monday, June 6, 2022

Virginia Tax Review Publishes New Issue

Virginia Tax Review (2016)The Virginia Tax Review has published Vol. 40, No. 3 (Spring 2021):

Hayes R. Holderness (Richmond), Changing Lanes: Tax Relief for Commuters, 40 Va. Tax Rev. 453 (2021) (reviewed by Young Ran (Christine) Kim (Utah, moving to Cardozo; Google Scholar) here):

Tax law reaches all parts of life, and societal expectations about life’s activities often affect how the law is applied. As those expectations change, application of the law should be expected to change in turn. This Essay highlights changing societal views about commuting, particularly as a result of the COVID-19 pandemic, to demonstrate how even long-standing positions under the tax law can be quickly uprooted. Specifically, as working from home becomes standard, taxpayers should be afforded tax relief when required to commute into the workplace, despite the fact that the tax law traditionally has rejected such relief.

Grayson M. P. McCouch (Florida), Custodianships, Trusts, and Guardianships, 40 Va. Tax Rev. 475 (2021):

 

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June 6, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Liscow: Redistribution For Realists

Zachary Liscow (Yale; Google Scholar), Redistribution For Realists, 107 Iowa L. Rev. 495 (2022):

Iowa Law Review 2 (2022)Inequality is a defining issue of our time. Nevertheless, the longstanding economic orthodoxy for addressing inequality is that we should redistribute solely through tax and transfer policies because those are the most efficient means for doing so.

While the orthodoxy holds in theory, it fails in practice because of the public’s psychology about redistribution. New evidence shows that individuals silo their policy views: many are reluctant to redistribute through taxes and transfers but are willing to do so in other policy domains, like provision of necessities such as transportation, food, and housing. The orthodoxy thus restricts redistribution efforts to a policy domain where the public resists redistribution while neglecting the many policy domains where the public embraces redistributive policies. The current orthodoxy may be more efficient, but it is also a prescription for widespread inequality.

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June 6, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Lesson From The Tax Court: Taxpayer Held To His Word(s) Regarding Alimony

Camp (2021)Congress eliminated the deduction for alimony in the December 2017 Reconciliation Act (informally called the Tax Cuts and Jobs Act, or TCJA).  The concept is still important, however.  First, the legislation grandfathered in alimony payments made pursuant to divorce or separation instruments executed on or before December 31, 2018.  So the question of whether a payment qualifies as alimony will thus still be important for many taxpayers for years to come.  Second, the definition continues to play an important role in analyzing the support requirements for dependents.  See §152(d)(5).

Determining whether payments constitute alimony is not always easy and errors can lead to §6662 penalties for careless taxpayers and their advisors.  Jihad Y. Ibrahim v. Commissioner, T.C. Summ. Op. 2022-7 (May 16, 2022) (Judge Weiler), teaches us the importance of the words used in divorce instruments. There, Dr. Ibrahim sought to deduct $50,000 in payments to his ex-wife.  He called them as alimony on his return.  But the marital separation agreement and the divorce decree did not call them that.  The IRS disallowed the deduction as contrary to the plain language in the divorce decree.  Despite Dr. Ibrahim’s ingenious arguments, the Tax Court agreed with the IRS and held the taxpayer to his word(s).  Details below the fold.

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June 6, 2022 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (1)

TaxProf Blog Weekend Roundup

Sunday, June 5, 2022

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 new #1 paper and new papers joining the list at #3, #4, and #5:

  1. SSRN Logo (2018) [417 Downloads]  Taxing Robots, by Rita de la Feria (Leeds; Google Scholar) & Maria Amparo Grau Ruiz (Universidad Complutense de Madrid; Google Scholar)
  2. [400 Downloads]  A Matter of High Interest: How a Quiet Change to an Actuarial Assumption Turbocharges the Life Insurance Tax Shelter, by Andrew Granato (J.D.|Ph.D., Yale; Google Scholar)
  3. [300 Downloads]  Taxation and the Knowledge Economy, by Alan Kirkpatrick (Bournemouth) & Anne Fairpo (Bournemouth)
  4. [296 Downloads]  Filing While Black: The Casual Racism Of The Tax Law, by Steven Dean (Brooklyn)
  5. [221 Downloads]  The Use of New Technologies in VAT and Taxpayers’ Rights, by Marta Papis-Almansa (Copenhagen)

June 5, 2022 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink

Saturday, June 4, 2022

This Week's Ten Most Popular TaxProf Blog Posts

IRS Dangles Telework To Lure Workers To Beleaguered Agency

Bloomberg, IRS Dangles Telework to Lure New Recruits to Beleaguered Agency:

IRS Logo 2The IRS is in the midst of a return-to-office effort that will offer many employees the option to telework some or most of the time, something agency officials and union leaders view as an asset in recruiting.

The Covid-19 pandemic forced the agency to close its offices for several months in 2020. While employees tasked with processing paper tax returns and other documents have been working in-person for the last two years, many other employees have continued to work remotely.

The IRS is taking a phased approach to bringing everyone back to the office, which started in late April with members of leadership coming in at least once per pay period. As of May 8, employees without formal telework agreements were required to return to the office, and other employees could do so voluntarily.

“We’re starting to see increased foot traffic in our buildings again,” Geralda Larkins, project director of return to office at the IRS, said in an interview.

Normal operations are scheduled to begin on June 25, when employees will need to follow the specific rules of their telework agreements, including whether they need to be in-office a certain number of days each pay period or need to telework within a certain distance of their office.

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June 4, 2022 in IRS News, Tax | Permalink

Friday, June 3, 2022

Weekly SSRN Tax Article Review And Roundup: Roberts Reviews Stanley Surrey's Memoirs Edited By Zelenak & Mehrotra

This week, Tracey Roberts (Cumberland; Google Scholar) reviews A Half Century with the Internal Revenue Code, The Memoirs of Stanley S. Surrey (Carolina Academic Press 2022), edited by Lawrence A. Zelenak (Duke) and Ajay K. Mehrotra (Northwestern; Google Scholar).

Roberts (2020)

Stanley Surrey devoted five decades to shaping and elucidating the structures of the income tax, to decrying its use as a mechanism to grant unwarranted financial favors to select interest groups, and to training generations of students and lawyers for leadership in government, in academia, and in private practice in the U.S. and internationally. Surrey served as an advisor and Tax Legislative Counsel to the Department of Treasury from 1937 to 1947, as the Assistant Secretary of the Treasury from 1961 to 1969, and as a professor of law at the University of California, Berkeley School of Law and at Harvard Law School, where he founded the International Tax Program. Surrey saw himself as an activist scholar. In their introduction to their edited edition of Surrey’s memoirs, Larry Zelenak and Ajay Mehrotra survey Surrey’s extraordinary career as largely one of unified thought and action in service to fairness, equity, the integrity nation’s tax system, and its effectiveness in securing the federal fisc. 

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June 3, 2022 in Scholarship, Tax, Tax Scholarship, Tracey Roberts, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Tax Policy In The Biden Administration

Cauble: Questions The IRS Will Not Answer

Emily L. Cauble (DePaul; moving to Wisconsin), Questions the IRS Will Not Answer, 97 Ind. L.J. 523 (2022) (reviewed by Sloan Speck (Colorado; Google Scholar) here): 

Indiana Law JournalWhen a taxpayer plans to undertake a transaction and its tax consequences are unclear, the taxpayer can request a letter ruling from the IRS. The IRS issues numerous letter rulings each year. In 2020, for instance, the IRS issued 777 letter rulings. The IRS refrains from issuing letter rulings on certain topics. At the beginning of each year, the IRS publishes an updated list of the topics on which it will not rule. Many of the topics on which it will not rule arise in areas of tax law governed by standards where the tax outcome depends heavily on each transaction’s specific facts. This pattern is consistent with the IRS’s stated position that it ordinarily does not rule in certain areas because of the factual nature of the matter involved.

This Article suggests that a policy against ruling on fact-specific topics sacrifices an opportunity to rule on many of the very topics for which a letter ruling could be particularly useful. Because the fact-specific nature of a topic makes it ill-suited for generally applicable guidance, such a topic is a particularly good candidate for a letter ruling.

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

Thursday, June 2, 2022

Kim Clausing Leaves Treasury Department To Return To UCLA

Bloomberg, Treasury Tax Official Leaving Biden Administration:

Clausing (2021)The Treasury Department’s deputy assistant secretary of tax analysis, Kimberly Clausing, is leaving the Biden administration.

Clausing, an expert on corporate profit shifting, was part of the administration’s team that sought to recoup money the government was owed but didn’t collect. She pushed to increase taxes on corporations and wealthy Americans, including upping the domestic corporate rate to 28%.

Tuesday was her last day, according to people familiar with the matter. Clausing is returning to academia, a Treasury spokeswoman said. Clausing was an economics professor at Reed College in Oregon before she took a post at UCLA School of Law. ...

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June 2, 2022 in Legal Education, Tax, Tax News, Tax Prof Moves | Permalink

WSJ: Is The Income Tax Rate On The Rich 8% (Biden), Or 23% (Saez & Zucman)?

Joe BidenWall Street Journal, Is the Income-Tax Rate on the Rich 8%, or 23%? Depends on Whose Math You Use:

WSJWhat do the wealthy pay in federal taxes? On paper, the top marginal income-tax rate is 37% on ordinary income and 23.8% on capital gains. Government estimates put high-income filers’ average rates in the mid-20s.

A new Biden administration analysis, however, pegs the average tax rate for the 400 wealthiest households at 8.2% from 2010 to 2018 [Greg Leiserson (Senior Economist, CEA) & Danny Yagan (Chief Economist, OMB), What Is the Average Federal Individual Income Tax Rate on the Wealthiest Americans?]. If that is right, the administration has a firmer case to raise taxes on the ultrarich.

But it isn’t so simple. ...

In writing the White House study, administration economists Greg Leiserson and Danny Yagan chose a numerator and denominator reflecting their approach to analyzing tax policy.

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June 2, 2022 in Tax, Tax News | Permalink

Susan Morse Named Associate Dean For Academic Affairs At Texas

Dean-Designate Chesney Announces New Associate Deans (May 31, 2022):

Texas Law has announced that four current faculty members—Susan Morse, Melissa Wasserman, Shavonne Henderson, and Eden Harrington—have agreed to serve the law school community as Associate Deans, effective July 1. Collectively, this group will form the dean’s senior leadership team, advising the dean while also carrying out the charges described below.

“We are all very fortunate (me most of all) to have such a talented group of people take on these important roles,” said Dean-Designate Bobby Chesney.

Announcing Our New Associate Deans

Morse 2ASSOCIATE DEAN FOR ACADEMIC AFFAIRS SUSAN MORSE
The Associate Dean for Academic Affairs is charged with curating our curriculum, promoting pedagogical excellence, and addressing a wide range of faculty and student-related issues.

Susan Morse joined the University of Texas law faculty in 2013. She studies and writes about  international tax policy, tax compliance and regulatory design. She is interested in the interaction between legal systems and private ordering. 

Recent writings in tax policy include The Quasi-Global GILTI Tax, 18 Pitt. Tax Rev. 1932 (2021) (symposium contribution);  Do Tax Compliance Robots Follow the Law? (symposium contribution), 16 Ohio State Tech. L. J. 278 (2020); GILTI: The Co-operative Potential of a Unilateral Minimum Tax, 2019 British Tax Rev. 512; Does Parenting Matter?  U.S. Firms, Non-U.S. Firms, and Global Tax Accruals (with Eric J. Allen), 4 J. L. Fin. & Acct'g 239 (2019); International Cooperation and the 2017 Tax Act, 128 Yale L. J. Forum 362 (Oct. 25, 2018) and Seeking Comparable Transactions in Patent and Tax, 37 Rev. Litig. Brief (2018).

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June 2, 2022 in Legal Education, Tax, Tax Prof Moves | Permalink

Wednesday, June 1, 2022

The Journey Continues . . .

I posted this five years ago today (June 1, 2017):

JourneyI am proud of the progress we have made toward these goals and honored to continue to serve in this role. 

June 1, 2022 in Legal Education, Pepperdine Legal Ed, Tax | Permalink | Comments (0)

National Tax Association 115th Annual Conference Call for Papers: June 6 Deadline

NTA

National Tax Association 115th Annual Conference Call for Papers:

The 115th Annual Conference on Taxation will be held at the JW Marriott Marquis Miami, in Miami, Florida. The conference will cover a broad range of topics in tax policy and public finance. We welcome submissions from the fields of accounting, economics, law, and public policy and administration, as well as research from other fields that bears on these topics.

This year’s conference agenda is being framed by recent significant developments: the impact of COVID-19 on the economy, the rise of inflation, climate change, ESG, and continuing activity within the OECD towards fundamental changes in international tax. We especially encourage submissions in line with these topics.

You are invited to submit the following: individual papers to be integrated into sessions, proposals for complete sessions of papers, and proposals for panel discussions. Please note that full session proposals are mere suggestions of groupings. The conference committee reserves the right to consider and accept individual papers from a complete session rather than accepting the complete session. Submitters of complete sessions are required to enter abstracts for each paper in the session.

The submission deadline is June 6, 2022.

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June 1, 2022 in Conferences, Legal Education, Scholarship, Tax, Tax Conferences, Tax Scholarship | Permalink

Subscribing To TaxProf Blog

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

Kathleen Kerrigan Begins Her Two-Year Term As Tax Court Chief Judge Today

U.S. Tax Court Press Release:

Judge Kathleen Kerrigan has been elected Chief Judge to serve a two-year term beginning June 1, 2022. The election of the Chief Judge by the Judges of the Tax Court is undertaken biennially in accordance with statutory requirements.

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

Tuesday, May 31, 2022

Schmalbeck & Soled: Substance Over Form In Transfer Tax Adjudication

Richard Schmalbeck (Duke) & Jay A. Soled (Rutgers; Google Scholar), Substance Over Form In Transfer Tax Adjudication, 55 Loy. L.A. L. Rev. 609 (2022):

The elevated exemption level under the federal transfer tax system (now in excess of $24 million for a married couple) has opened up new and abusive tax-avoidance opportunities. In many areas of the tax law, the substance over form doctrine historically has been effective in controlling such abuses; however, for a myriad of reasons, transfer tax jurisprudence has been marred by the reluctance of courts to embrace this doctrine. In this analysis, we urge reconsideration of that posture.

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May 31, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

IRS Releases 2021 Data Book: Audit Rates Plummet For The Rich

Following up on my previous post, GAO: IRS Audit Rates Plummet For The Rich:  IR-2022-111, IRS Releases Fiscal Year 2021 Data Book Describing Agency’s Activities (May 26, 2022):

2021 IRS Data BookThe Internal Revenue Service today issued the Data Book detailing the agency's activities during fiscal year 2021 (October 1, 2020 – September 30, 2021). ...

In addition to describing work performed during the pandemic, the IRS Data Book for fiscal year 2021 comprises 33 tables describing a wide variety of IRS activities from returns processed, revenue collected, and refunds issued to the number of examinations conducted and the amount of additional tax recommended, as well as budget and personnel information. The Data Book provides point-in-time estimates of IRS activities as of September 2021. A lengthier discussion of recent data was also released today.

IRS Table 2

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May 31, 2022 in IRS News, Tax | Permalink

Lesson From The Tax Court: The Sharp Corners Of The §170 Substantiation Requirements

Camp (2021)The sainted Justice Holmes once wrote:  “Men must turn square corners when they deal with the Government.”  It is no accident that Justice Holmes wrote that in a tax case.  Rock Island R.R. v. United States, 254 U.S. 141, 143 (1920).  Of all the corners in all the laws governing citizen interaction with government, tax laws contain some of the squarest.  This is a lesson we’ve seen before.  See Lesson From The Tax Court: The Structure Of Substantiation Requirements of §170, TaxProf Blog (Sept. 24, 2018).  But I think it’s a lesson worth repeating: the substantiation rules in §170 contain some very sharp corners.  The lesson is important for high-end donations such as the one in today’s case.  And it is not just a lesson for taxpayers, but also for charities.

In Martha L. Albrecht v. Commissioner, T.C. Memo. 2022-53 (May 25, 2022) (Judge Greaves), the taxpayer made a very large donation to a museum and claimed a §170 charitable donation deduction on her return.  The IRS said that the 5-page document memorializing the gift did not meet the statutory substantiation requirements for such a gift.  The Tax Court agreed.  Thus, no §170 deduction.  Details below the fold.

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May 31, 2022 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (0)

TaxProf Blog Holiday Weekend Roundup

Monday, May 30, 2022

ABA Tax Section|Tax Analysts Public Service Tax Fellowship

ABA Tax Section, Tax Analysts Public Service Fellowship:

ABA Tax Analysts 2In response to a need for tax legal assistance for low-income taxpayers, to foster a greater interest in tax-related public service, and to provide seasoned attorneys the opportunity to move into the public interest sector, the ABA Tax Section is pleased to announce a partnership with Tax Analysts to launch the Tax Analysts Public Service Fellowship.

This two-year fellowship offers practicing tax attorneys the opportunity to work in public interest tax law with a nonprofit organization or government entity. For the initial year, the fellow will be based at La Posada Tax Clinic in Twin Falls, Idaho. This powerful nonprofit provides extensive free tax services throughout the state of Idaho.

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

Professional Sports Teams In High-Tax States Are At A Competitive Disadvantage

Erik Hembre (University of Illinois-Chicago; Google Scholar), State Income Taxes and Team Performance, 29 Int'l Tax & Pub. Finance 704 (2022):

Professional athletes are both highly paid and highly mobile workers. Previous research has shown that athletes respond to state income taxes differentials through bargaining and migration. If athletes are compensated for state tax burden, teams located in higher taxed states may be at a competitive disadvantage. I examine the effect of state income taxes on professional sports team performance. Using within-team variation in state top marginal income tax rates, I show that, only after the availability of free agency, did state income tax increases lower team winning percentages. I find that for each percentage point increase in state income tax rates, team winning declines by 0.70 percentage points.

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May 30, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Sunday, May 29, 2022

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 returning to the list at #5:

  1. SSRN Logo (2018) [544 Downloads]  How Treasury and the IRS Have Allowed High-Net-Worth Taxpayers to Exploit Stepped-Up Basis on Intergenerational Wealth Transfers, and How They Can Stop It: Answers to Question for the Record, by Daniel Hemel (Chicago; moving to NYU; Google Scholar)
  2. [408 Downloads]  Taxing Robots, by Rita de la Feria (Leeds; Google Scholar) & Maria Amparo Grau Ruiz (Universidad Complutense de Madrid; Google Scholar)
  3. [386 Downloads]  A Matter of High Interest: How a Quiet Change to an Actuarial Assumption Turbocharges the Life Insurance Tax Shelter, by Andrew Granato (J.D.|Ph.D., Yale; Google Scholar)
  4. [371 Downloads]  Permanent Establishment and Fixed Establishment in the Context of the Subsidiary and the Digital Economy, by Stoycho Dulevski (University of National and World Economy; Google Scholar)
  5. [229 Downloads]  Digital Assets: A Call To Action, by Johan David Michels (Queen Mary University of London; Google Scholar), Sharon Hartung (Technologist & Founder, Your Digital Undertaker) & Christopher Millard (Queen Mary University of London)

May 29, 2022 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink

Saturday, May 28, 2022

This Week's Ten Most Popular TaxProf Blog Posts

  1. Top Ten 2Bryan Camp (Texas Tech), Lesson From The Tax Court: Counting The Days
  2. Wall Street Journal, ABA Council Votes 20-1 To Advance Proposal Permitting Law Schools To Go Test Optional. What Are The Implications Of Admitting Students Who Don't Take The LSAT Or GRE?
  3. Florida Politics, Markel Murder Trial:
  1. Paul Caron (Dean, Pepperdine), Legally Blonde Dean
  2. David Faigman (Dean, UC-Hastings), Law School To Change Its Name In July Due To Founder's Role In Native American Genocide 
  3. New York Times Op-Ed, The Data-Driven Answer To A Rich And Happy Life
  4. Association of Mid-Career Tax Professors, 8th Annual  Workshop At North Carolina
  5. Christopher Birdsall (Boise State) & Seth Gershenson (American), The Pro Bono Penalty: Extracurricular Activities and Demographic Disparities in Bar Exam Success
  6. Brian Soucek (UC-Davis), The Constitutionality Of Required Faculty Diversity Statements
  7. Press Release, Pepperdine Caruso Law Welcomes New Faculty Members in the 2022-23 Academic Year

May 28, 2022 in About This Blog, Legal Education, Tax, Weekly Top 10 TaxProf Blog Posts | Permalink

Trusts & Estates: The Next Big Thing In Big Law

Law.com, Big Law Trusts & Estates Work Risky But Rising:

Trusts and estates work in Big Law is back in a big way. Large law firms are recognizing the demand associated with baby boomers passing along their wealth to the next generation, and the COVID-19 pandemic has also been a boon for estate planning efforts.

But the practice can also come with a hefty insurance price tag, as brokers say underwriters are skittish about the high-value claims that mistakes can generate. As a result, for this work to succeed within big firms, lawyers must be active producers, rather than simply stepping in to help other revenue generators.

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May 28, 2022 in Tax, Tax News | Permalink

Friday, May 27, 2022

Weekly SSRN Tax Article Review And Roundup: Kim Reviews Dean's The Casual Racism Of The Tax Law

This week, Young Ran (Christine) Kim (Utah, moving to Cardozo; Google Scholar) reviews a new work by Steven A. Dean (Brooklyn), Filing While Black: The Casual Racism of the Tax Law, 2022 Utah L. Rev. __.

Kim

In response to a growing recognition of the absence of demographic data in federal datasets, including tax data, President Biden signed Executive Order 13985 in 2021, which, inter alia, established an Interagency Working Group on Equitable Data. The Treasury Department is also undertaking a comprehensive research initiative to study the relationship between the U.S. tax code and racial inequities. Senate Finance Committee Chair Ron Wyden (D-OR) has called for the IRS to collect and disclose more information relating to the tax code’s effect on different demographics because it makes no sense to blind lawmakers to the key data that would illuminate injustice in our tax laws. Those recent developments are the results of hard work by dedicated scholars like Alice Abreu, Jeremy Bearer-Friend, Dorothy Brown, Wei Cui, Steven Dean, Francine Lipman, and Goldburn Maynard. In this review, I would like to recognize Steven Dean's recent essay, Filing While Black: The Casual Racism of the Tax Law, 2022 Utah L. Rev. ___. Dean's essay is adapted from his testimony given before the Committee on Ways and Means of the U.S. House of Representatives on June 10, 2021, and was presented at the 2021 Utah Law Review Symposium, entitled #includetheirstories: Rethinking, Reimagining, and Reshaping Legal Education, for which I was an organizer. (Video clips are available here.)

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May 27, 2022 in Christine Kim, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Tax Policy In The Biden Administration