Passive Income Withholding: $200 Billion In Revenue Without Raising Taxes

Jay A. Soled (Rutgers; Google Scholar) & James Alm (Tulane; Google Scholar), Passive Income Withholding: $200 Billion in Revenue Without Raising Taxes, 187 Tax Notes Fed. 1163 (May 19, 2025):

In this article, Soled and Alm propose a reform under which estimated taxes on investment income would, by default, be automatically withheld by the institution making the payment, which they argue would improve compliance and raise substantial tax revenue.

Conclusion
Tax reform is coming, but no one knows the exact shape it will take. At least three possible agendas are on tap: tax cuts, relief of administrative and compliance burdens, and deficit reduction. Of course, equity considerations are also on the agenda of many policymakers.

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Request For Nominations: Tax Analysts Award of Distinction (State & Local Tax)

Request for Nominations: 

Tax Analysts Award of Distinction
Tax Analysts is proud to introduce the Awards of Distinction, a new annual recognition program honoring individuals and organizations whose work has transformed the field of taxation. 

Each year, the Awards of Distinction will spotlight innovation, impact, and integrity across three categories: 

• U.S. State and Local Taxation
• U.S. Federal Taxation
• International/Cross-Border Taxation

This year’s inaugural award will focus on State and Local Taxation — celebrating those whose work has shaped policy, improved administration, or advanced public understanding of taxation at the state level. ...

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Harvard, Yale, And Others May Have Another Litigation Opportunity

Victor Thuronyi (IMF), Harvard, Yale, and Others May Have Another Litigation Opportunity, 187 Tax Notes Fed. 1241 (May 19, 2025):

In this article, Thuronyi examines the constitutionality of a proposed exception to the excise tax on university endowments and the difficulties in determining whether an institution is truly “religious.” ...

Consider ... the exception to the excise tax on university endowments contained in the chair’s mark for the House Ways and Means Committee:

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What Are The Real Tax Risks For Harvard?

Harvey P. Dale (NYU), Daniel J. Hemel (NYU; Google Scholar) & Jill S. Manny (NYU), What Are the Real Tax Risks for Harvard?, 187 Tax Notes Fed. 1447 (May 26, 2025):

Although we focus here on Harvard — the principal target of Trump’s revocation threats so far — our analysis has implications for other nonprofit organizations and broader policy debates. First, we highlight steps that nonprofit organizations can take to minimize the tax consequences that would follow from the politically motivated revocation of their section 501(c)(3) status. This analysis provides both a risk assessment and a playbook for institutions pushing back against a potential presidential attack.

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Has The Supreme Court Already Resolved How Loper Bright Applies To Section 7805 Tax Regulations?

Mitchell M. Gans (Hofstra), Has the Supreme Court Already Resolved How Loper Bright Applies to Section 7805 Regulations?, 187 Tax Notes Fed. 1069 (May 12, 2025):

In a recent nontax case, the Supreme Court shed some light on a question that has been the subject of much debate in the tax community: whether, in applying Loper Bright, courts should give regulations issued under section 7805 mere Skidmore deference or the higher level of deference afforded to regulations issued under a statutory delegation of discretionary authority. In Vanderstok, applying language in the Gun Control Act of 1968 (GCA) that is difficult to distinguish from section 7805, the Court gave the agency’s rule Skidmore deference, which suggests that regulations issued under section 7805 will receive similar treatment.

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Gamage: Assessing State Business Taxation

David Gamage (Missouri-Columbia; Google Scholar), Beyond Blinders and Boomerangs: Assessing State Business Taxation, 115 Tax Notes St. 753 (Mar. 17, 2025):

Karl A. Frieden’s article, “Wearing Blinders in the Debate Over Business’s ‘Fair Share’ of State Taxes” and his subsequent article, “The Boomerang Effect of the Business ‘Fair Share’ Tax Debate,” jointly contend that progressive calls to strengthen state corporate income taxes (CITs) are misguided because businesses allegedly overpay certain other state and local taxes. This essay argues that, while Frieden does raise some valid points about the efficiency of specific tax design choices, his core argument fundamentally misconstrues the central issues: the ultimate incidence of business taxes, the pursuit of equity and efficiency, and the importance of combating harmful tax avoidance. 

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Tax Notes’ Taxing Issues Webinar: Reimagining The IRS: A Historic Conversation

(Sponsored Post) Tax Notes will present Reimagining the IRS: A Historic Conversation on Wed., May 28. The webinar is free, and CPE credits are available to attendees who meet the requirements.

On Wednesday, May 28 from 2 to 4 p.m. ET, Tax Analysts will bring together four former IRS commissioners for a powerful and timely conversation.

Daniel Werfel, Charles Rettig, Lawrence Gibbs, and John Koskinen will share in a historic panel discussion on how to structure a more effective and efficient IRS. This rare gathering of leadership voices, spanning decades of agency stewardship, offers an unparalleled opportunity to hear directly from those who have shaped the IRS from the inside out.

In today’s climate of budget constraints and administrative downsizing, the stakes have never been higher for the IRS. The agency requires the right balance of funding, staffing, and expertise to meet its critical mission, yet the path forward is complex. This discussion goes beyond politics to focus on how to ensure the IRS can uphold its core responsibilities of collections, privacy, and customer service.

The speakers are former IRS Commissioners Daniel Werfel, Charles Rettig, Lawrence Gibbs, and John Koskinen. The moderator is Tax Analysts’ President and CEO, Cara Griffith.

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Tax Considerations For The Potential U.S. Annexation Of Greenland

Libin Zhang (Fried Frank, New York), Tax Considerations for the Potential U.S. Annexation of Greenland, 186 Tax Notes Fed. 1843 (Mar. 10, 2025):

There have been many proposals over the last 150 years for the United States to acquire Greenland. However, the tax scholarship literature has neglected to focus on the tax consequences of such an annexation. Important and understudied issues include the taxation of the 58,000 Greenlanders, corporate taxation of controlled foreign corporations, and the potential extension of qualified opportunity zones to the world’s largest island. This article contributes to the growing field of critical tax manifest destiny studies as the United States reconsiders its territorial scope from the Arctic Ocean to the Gulf of America (Gulf of Mexico).

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Taxing Capital Gains At Death At A Rate Higher Than During Life

Steve Rosenthal (Tax Policy Center) & Robert McClelland (Tax Policy Center; Google Scholar), Taxing Capital Gains at Death at a Rate Higher Than During Life, 186 Tax Notes Fed. 2417 (Mar. 31, 2025):

In this article, Rosenthal and McClelland examine various proposals to tax unrealized gains, concluding that the best approach is to tax gifts and bequests of appreciated assets at death at a higher rate than during life.

Conclusion
Current tax law encourages wealthy investors to retain their appreciated assets throughout their lifetime to erase asset gains at death. It induces the rich to lock their capital into less productive investments, deprives our country of needed public revenue, and perpetuates dynastic wealth.

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Thuronyi: A Simpler Approach To Taxing Tips

Victor Thuronyi (Former Lead Tax Counsel, IMF), A Simpler Approach to Taxing Tips, 187 Tax Notes Fed. 305 (Apr. 14, 2025):

In this article, Thuronyi explains why exempting tips from taxation is problematic, and he proposes a different solution that would relieve tipped workers of the burden of monthly reporting, thus simplifying compliance and reducing tax on tipped workers without encouraging the expansion of tipping.

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Narotzki: Trump’s Tax Policy—Old Policies, Retroactive Rewards

Doron Narotzki (Akron; Google Scholar), Trump’s Tax Policy: Old Policies, Retroactive Rewards, 187 Tax Notes Fed. 309 (April 14, 2025): 

In this article, Narotzki explores the significant shortfalls in President Trump’s economic policies over the past several months, emphasizing their dependence on historically ineffective strategies. He argues that Trump’s economic proposals are driven more by political motivations than by coherent economic strategic objectives and could leave the country more exposed to geopolitical risks and economic volatility.

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Gergen & Nguyen: Exchange Funds At The Back End

Mark P. Gergen (UC-Berkeley) & Adam Nguyen (UC-Berkeley), Exchange Funds at the Back End, 187 Tax Notes Fed. 293 (April 14, 2025): 

In this article, Gergen and Nguyen explore the application of section 731(c) to distributions of publicly traded securities from an exchange fund.

The impetus for this article is a phone call one of us received from a reporter inquiring about Cache, a new player in the exchange fund field that has significantly lowered the minimum wealth and investment requirements for investing in an exchange fund. Exchange funds (aka swap funds) have been around since the middle of the 20th century. They enable a group of people who have concentrated positions of appreciated stock in different companies to diversify by combining their stocks in a pool. These pools used to be organized as corporations, but tax partnerships have long since taken over as the preferred vehicle. By lowering minimum wealth and investment requirements, Cache is making exchange funds available to people who aren’t particularly wealthy but have a large nest egg concentrated in one company. Individuals who received equity compensation are the classic example.

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Tax Notes’ Taxing Issues Webinar: Pillar Two At A Crossroads: U.S. Policy And What Comes Next

(Sponsored post) Tax Notes will present Pillar Two at a Crossroads: U.S. Policy and What Comes Next on Wed., April 23. The webinar is free, and CPE credits are available to attendees who meet the requirements.

The future of the OECD’s pillar 2 project and U.S. involvement remains a focal point of international tax discussions. As the global minimum tax continues to gain traction across jurisdictions, questions emerge about the direction of U.S. policy under the new administration. Can pillar 2 function effectively without U.S. participation? Are there possible compromises between the OECD and U.S. positions? How will companies be affected in a fragmented system?

Panelists include Mindy Herzfeld (Florida), Pat Brown (PwC), Joachim Englisch (Münster), and Scott M. Levine (Georgetown). The moderator is Tax Analysts’ President and CEO, Cara Griffith.

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Galler & Soled: Should PTIN Omissions Be Criminalized?

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

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

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

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

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Applications Are Open For Two ABA Tax Section Fellowships

ABA Tax Section, Tax Analysts Public Service Fellowship:

The application for the 2025-2027 Tax Analysts Public Service Fellowship is now open! Completed applications are due May 15, 2025. Send completed applications to [email protected].

The Tax Analysts Public Service Fellowship was created in 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.

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Applications Are Open For Tax Analysts Summer Fellowship

ABA Tax Section, Tax Analysts Summer Fellowship: 

The application period for the 2025 Tax Analysts Summer Fellowship is now open. Applications are due March 17, 2025. This will be our inaugural class of fellows. Tax Analysts and the Tax Section are excited to launch the fellowship and review submissions.

If you are interested in applying, please see the application for more information and note that you must find a Low-Income Tax Clinic (LITC) or other nonprofit tax organization willing to host you for 10 weeks over the summer, before you submit your application.

What is the Tax Analysts Public Service Fellowship?

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Tax Notes’ Taxing Issues Webinar: Navigating Potential Partnership Changes Under TCJA 2.0

(Sponsored post) Tax Notes will present Navigating Potential Partnership Changes Under TCJA 2.0 on Wed., Feb. 26. The webinar is free, and CPE credits are available to attendees who meet the requirements.

Legislative efforts to reform the Tax Cuts and Jobs Act may bring significant changes to partnership taxation. What proposed modifications to subchapter K are likely to gain traction? How might those changes affect taxpayers, advisers, and passthroughs? What revenue considerations are driving these discussions? And what challenges or opportunities could arise as Congress debates tax reform?

Panelists include Monisha Santamaria (KPMG); Steve Rosenthal, and Paul Schockett. The moderator is Tax Analysts’ President and CEO, Cara Griffith.

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New Tax Prof Articles In Tax Notes

Richard Schmalbeck (Duke) & Jay A. Soled (Rutgers; Google Scholar), Make the GSTT Exemption Portable Between Spouses, 186 Tax Notes Fed. 311 (Jan. 13, 2025):

In this article, Schmalbeck and Soled argue that the generation-skipping transfer tax exemption should be portable between spouses, which would be consistent with other code provisions that treat married couples as a single economic unit.

Jay A. Soled (Rutgers; Google Scholar) & Leslie Book (Villanova; Google Scholar), The Need for a General Two-Year Statute of Limitations, 186 Tax Notes Fed. 493 (Jan. 20, 2025):

In this article, Soled and Book argue that technological advances have eliminated the need for a general three-year statute of limitations and that Congress should thus shorten it to two years.

Kathleen DeLaney Thomas (North Carolina; Google Scholar), Designing a Standard Business Deduction, 186 Tax Notes Fed. 503 (Jan. 20, 2025):

In this article, Thomas explains how a standard business deduction could be structured and implemented to simplify small business taxation and reduce compliance costs.

Jeffrey L. Hoopes (North Carolina; Google Scholar), Eliminating the Corporate AMT Wouldn’t Cost Much in Lost Revenue, 186 Tax Notes Fed. 509 (Jan. 20, 2025):

In this article, Hoopes examines the effect of the corporate alternative minimum tax on the effective tax rates of 10 companies [AirBnb, Ally Financial, Blackstone, Corebridge Financial, Devon Energy, Duke Energy, GE, KKR, NVR, Whirlpool].

Doron Narotzki (Akron; Google Scholar) & Vered Narotzki (S.J.D. Candidate, Florida), TCJA: The False Dawn of Tax Reform, 186 Tax Notes Fed. 521 (Jan. 20, 2025):

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Hanlon & Hoopes: The Pharmaceutical Industry’s Effective Tax Rates Before And After The TCJA

Michelle Hanlon (MIT; Google Scholar) & Jeffrey L. Hoopes (North Carolina; Google Scholar), The Pharmaceutical Industry: Effective Tax Rates Before and After the TCJA, 185 Tax Notes Fed. 2325 (Dec. 23, 2024): 

In this report, Hanlon and Hoopes analyze various measures of the effective tax rate for domestic and foreign pharmaceutical companies in the five years before and after passage of the Tax Cuts and Jobs Act, with a focus on the largest companies [U.S.: Johnson & Johnson, Pfizer, Merck, AbbVie, Bristol-Myers Squibb, Celgene, Lilly, Abbott, Regerneron, Zoetis; Foreign: Novartis, Roche, Teva, Sanofi, GSK, Novo, Allergan, Astrazeneca, Shire, Takeda].

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IRS Chief Counsel Rescinds Job Offers To 3Ls Accepted Into Honors Program

Tax Notes, Federal Hiring Freeze Quickly Hits Prospective IRS Attorneys:

Graduate students who accepted offers to work at the IRS Office of Chief Counsel have begun seeing those offers rescinded following the freeze on federal hiring, according to professors.

President Trump on January 20 signed an executive order halting all federal hiring and specifying that the IRS shouldn’t begin hiring again until Treasury and the Office of Management and Budget determine that “it is in the national interest to lift the freeze.”

The order has already hit law school students who were expecting to join the agency, several law professors told Tax Notes. ...

Ted Afield of Georgia State University College of Law said that all his students with existing offers to work at the Office of Chief Counsel saw them rescinded following Trump’s inauguration, leaving them with little time to find new positions. ...

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Soled: The Estate Tax And Its Tacit Push To Be Charitable

Jay Soled (Rutgers; Google Scholar), The Estate Tax and Its Tacit Push to Be Charitable, 185 Tax Notes Fed. 2375 (Dec. 23, 2024):

In this article, Soled argues that Congress should maintain the estate tax because it nudges taxpayers to be more charitable than they likely would be without it.

Societies have levied estate taxes on accumulated wealth throughout ancient and modern history. In most industrialized countries, some people amass sufficient affluence for estate tax exposure, and those who fall within the scope of this prosperity often take extraordinary measures to defeat those taxes.

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Tax Treaties Do Not Protect Overseas Americans

Laura Snyder, Karen Alpert & John Richardson, Tax Treaties Do Not Protect Overseas Americans, 185 Tax Notes Fed. 793 (Oct. 28, 2024):

We appreciate this opportunity to respond to “Trump Vows to End ‘Double Taxation’ of Overseas Citizens” by Alexander Rifaat. 

While we have multiple concerns with the opinions expressed by professor Reuven Avi-Yonah in the article, we would like to focus on his comment about the tax treaties the United States has concluded with other countries. According to professor Avi-Yonah, the “tiebreaker” clause contained in these treaties serves to protect overseas Americans from double taxation.

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Avi-Yonah On FDII And Domestic Manufacturing Tax Rate

Reuven S. Avi-Yonah (Michigan; Google Scholar), Should FDII Be Abolished in 2025?, 185 Tax Notes Fed. 2209 (Dec. 16, 2024): 

Avi-Yonah describes the looming international conflicts regarding the U.S. foreign-derived intangible income provision.

Reuven S. Avi-Yonah (Michigan; Google Scholar), A Lower Corporate Tax Rate for Domestic Manufacturing?, 185 Tax Notes Fed. 2401 (Dec. 23, 2024): 

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Challenging The Johnson Amendment: What SAFE SPACE Gets Right—And Wrong

Benjamin M. Leff (American; Google Scholar), Challenging the Johnson Amendment: What SAFE SPACE Gets Right—and Wrong, 185 Tax Notes Fed. 51 (Oct. 7, 2024):

In this article, Leff argues that the IRS’s interpretation of section 501(c)(3)’s prohibition on campaign intervention (the Johnson Amendment) is unconstitutional, as claimed in a recent Tax Court petition, but that the petitioner in that case unnecessarily asserts a dangerously broad strategy for vindicating charities’ free speech rights.

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Cryptocurrency Public Key Reporting: Using Embedded Technology To Aid Tax Compliance

Haozheng Jiang (J.D. 2026, St. Louis) & Henry Ordower (St. Louis), Cryptocurrency Public Key Reporting: Using Embedded Technology to Aid Tax Compliance, 185 Tax Notes Fed. 2119 (Dec. 16, 2024):

This report proposes that U.S. taxpayers report each blockchain public key they control and associate it with their taxpayer identification numbers or with the TINs of the beneficial owners of the public keys and the underlying cryptocurrency positions. Public key disclosure and association will enable the IRS to develop the capability to match public blockchain transactions with the U.S. taxpayers engaged in them and thereby counteract the anonymity or, more accurately, pseudonymity of cryptocurrency. This reporting would (1) supplement the contentious and incomplete existing third-party reporting of cryptocurrency transactions involving U.S. taxpayers; (2) diminish the perceived competitive disadvantage that third-party reporting places on hosting services; (3) limit demands for legislation requiring the marking to market of cryptocurrency transactions or outlawing cryptocurrency unless governing software automatically collects owner data and reports it to governmental authorities; and (4) facilitate the determination and collection of income tax from taxpayers who invest or transact in cryptocurrencies.

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A Flawed Critique Of Progressive State Tax Policy

Darien Shanske (UC-Davis; Google Scholar), Michael Mazerov (Center on Budget and Policy Priorities), Dan Bucks (Multistate Tax Commission), Peter Enrich (Northeastern) & Carl Davis (Institute on Taxation and Economic Policy), Incidence Is Not Incidental: A First Response to COST's Flawed Critique of the Pursuit of Progressive State Tax Policy, 114 Tax Notes St. 173 (Oct. 21, 2024):

SALT in the Public Interest presents government and academic perspectives on state and local tax issues in a roundtable discussion format featuring former Multistate Tax Commission Executive Director Dan R. Bucks; Peter D. Enrich, professor emeritus at the Northeastern University School of Law; Michael Mazerov, who recently retired from the Center on Budget and Policy Priorities; and professor Darien Shanske of the University of California, Davis, School of Law (King Hall). This column also features guest commentator Carl Davis, research director for the Institute on Taxation and Economic Policy. Tax Notes State senior editor Doug Sheppard moderates the discussion.

In this installment, the authors respond to a recent article by Karl Frieden of the Council On State Taxation [Wearing Blinders in the Debate Over Business’s ‘Fair Share’ of State Taxes, 112 State Tax Notes 91 (Apr. 8, 2024)], arguing that it attributes a position to them that they’ve never taken and is fundamentally flawed because it evaluates tax fairness without considering incidence.

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Tax Notes 2024 Persons Of The Year

Tax Notes Federal Persons of the Year:

Dorothy Brown, Champion for Change:  Dorothy Brown reflects on her time spent serving as a member of the Treasury Advisory Committee on Racial Equity and the committee’s ultimate success in advocating for Treasury to release regulations on sharing more data with the Census Bureau to help conduct critical tax analysis.

Dorothy Brown isn’t afraid to speak her mind, and that’s exactly what she’s done this year to expedite Treasury’s progress on addressing racial inequities in the U.S. tax code.

“Treasury is an agency that’s run amok,” Brown told Tax Notes November 22 in her office at Georgetown University Law Center. “They do what they want, when they want, however they want, and nobody, apparently, has the guts to say, ‘We’re going in a different way.’”

Brown, a renowned academic and author of The Whiteness of Wealth: How the Tax System Impoverishes Black Americans — And How We Can Fix It, has been a high-profile advocate of Treasury collecting and sharing statistics on tax and race with the U.S. Census Bureau.

“If you want to talk about tax analysis, you’ve got to have the race and class data. People need to see who’s getting loopholes and who’s getting shut out of loopholes,” said Brown, who serves as the Martin D. Ginsburg Chair in Taxation at Georgetown Law.

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Avi-Yonah & Narotzki: The Tariffs Are Coming! The Tariffs Are Coming!

Reuven S. Avi-Yonah (Michigan; Google Scholar) & Doron Narotzki (Akron; Google Scholar), The Tariffs Are Coming! The Tariffs Are Coming!, 185 Tax Notes Fed. 1991 (Dec. 9, 2024): 

In this installment of Reflections With Reuven Avi-Yonah, Avi-Yonah and Narotzki explain the use of tariffs and, in light of the new administration’s likelihood of maintaining current tariffs and adding new ones, suggest policies to make the best of the situation, including channeling economic tax benefits to middle- and low-income taxpayers.

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Hoopes: Should The IRS Regulate Tax Return Preparers?

Jeffrey L. Hoopes (North Carolina; Google Scholar), Should the IRS Regulate Tax Return Preparers?, 185 Tax Notes Fed. 1963 (Dec. 2, 2024):

Tax compliance in the United States is costly and cumbersome. It is no surprise that more than half of all U.S. taxpayers believe it necessary to pay a return preparer to help them comply with their tax filing obligations. Tax advice, like legal advice, medical advice, and other forms of professional advice, is often given by extremely competent advisers who have spent a lifetime mastering the complex and changing environment in which they advise. And like legal advice and medical advice, the consequences of bad tax advice can be catastrophic. However, unlike legal and medical advice, tax advice is relatively unregulated in the United States. In this brief article, I review a single question poll to gauge what tax experts, mostly university-based accounting, law, and economics tax experts, think about the IRS’s regulation of return preparers. ...

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Wallace & Welton: Luxury, Pigouvian, Sin, Oh My — A Politically Agreeable Carbon Tax

Clinton G. Wallace (South Carolina; Google Scholar) & Shelley Welton (Penn), Luxury, Pigouvian, Sin, Oh My: A Politically Agreeable Carbon Tax, 185 Tax Notes Fed. 1755 (Dec. 2, 2024):

Policymakers and commentators mostly treat economic inequality and climate change as distinct and unrelated challenges. In contrast, the public has been taking a less siloed view: Kim Kardashian, Jeff Bezos, and Kylie Jenner have all received blowback, often on social media, for their consumption that produces carbon emissions. Most recently, critics berated Taylor Swift for the massive carbon emissions caused by her private jet use, arguing that her actions belie her everywoman political orientation. The climate change implications of the lifestyles of the rich and famous are starting to permeate the public consciousness.

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Johnson: The Misfocused Excise Tax On Stock Buybacks

Calvin H. Johnson (Texas), The Misfocused Excise Tax on Stock Buybacks, 185 Tax Notes Fed. 1745 (Dec. 2, 2024): 

In this article, Johnson argues that the Treasury green book proposal to increase the excise tax on stock buybacks to 4 percent would do more harm than good because it would shift distributions from buybacks to unjustly taxed dividends and increase corporate accumulations and already excessive CEO salaries.

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Sheffrin: Realization Makes An Intellectual Comeback

Steven M. Sheffrin (Tulane; Google Scholar), Realization Makes an Intellectual Comeback, 185 Tax Notes Fed. 1737 (Dec. 2, 2024): 

The case for taxing unrealized capital gains is based on the Haig-Simons definition of income. In this definition, income equals consumption plus savings when savings includes both realized and unrealized capital gains. If asset prices change because of changes in future cash flows, Haig-Simons income can provide an appropriate guide for designing tax policies. However, asset prices can also change because of changes in interest or discount rates. There is a long and ongoing literature in tax policy that recognizes that asset price changes arising from interest or discount rate changes do not fit into the Haig-Simons framework.

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Johnson: The ‘Satisfactory Explanation’ Obligation For Tax Regulations

Calvin H. Johnson (Texas), The ‘Satisfactory Explanation’ Obligation for Tax Regulations, 184 Tax Notes Fed. 2713 (Sept. 30, 2024):

In this article, Johnson argues that courts should determine whether agencies have provided the required “satisfactory explanation” for new regulations by examining the full internal administrative record of agency deliberations, including agency testimony and not just the official preamble.  He counsels the courts to be humble because court intrusions restraining administrative decisions are likely to do more harm than good.

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Original Sin: Cost Sharing In The United States

Elizabeth J. Stevens (Caplin & Drysdale, Washington, D.C.) & H. David Rosenbloom (Caplin & Drysdale, Washington, D.C.; NYU), Original Sin: Cost Sharing in the United States, 185 Tax Notes Fed. 1197 (Nov. 11, 2024): 

This article explores a simple thesis: that the “cost sharing” rules of the United States are at the core of most of today’s global problems in the field of international tax policy. We will explain, with minimum jargon, what U.S. cost sharing has been and what it currently is, how it has engendered so many dubious outcomes, and why it seems to have done so. We argue that U.S. cost sharing is largely responsible for the chaotic state of affairs regarding taxation of cross-border income. The lesson for U.S. policymakers today is a simple one: Do not sit on your taxing rights.

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Haneman: The Estate Tax And De/Valuing Postmortem Publicity Rights

Victoria J. Haneman (Creighton; Google Scholar), The Estate Tax and De/Valuing Postmortem Publicity Rights, 185 Tax Notes Fed. 1241 (Nov. 11, 2024):

Important policy considerations stand in tension at the intersection of tax law and the right to privacy. On the one hand, it is problematic to allow a taxpayer to destroy a valuable asset through a testamentary instrument just to avoid payment of estate tax. On the other, it is troubling to force post-death commercialization of rights that are so personal to the deceased and potentially shape legacy.

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Rotten To The Core: The EU's Court Of Justice Decision In Apple

Ruth Mason (Virginia; Google Scholar) & Stephen Daly (King's College London; Google Scholar), Rotten to the Core: The EU's Court of Justice Decision in Apple, 116 Tax Notes Int’l 987 (Nov. 11, 2024):

This article takes an in-depth look at the deeply flawed EU Court of Justice decision in the Apple state aid case. We discuss whether any legitimate legal theory could have supported the Commission's retroactive application of the 2010 Authorized OECD Approach (AOA) to Ireland's tax ruling for Apple, and if so, whether a proper interpretation of the AOA would have required Ireland to allocate most of Apple's global income to Ireland, despite ample evidence of Apple's substantial US activities. We also consider the General Court's decision and whether the Court of Justice's failure to apply relevant precedents, including Fiat, Amazon, and Engie, reasonably can be attributed to the sometimes-categorization of the Court of Justice as a civil law court. 

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Tax Notes’ Taxing Issues Webinar: Election Implications For Tax Policy

(Sponsored post) Tax Notes will present What's Next for Tax Policy on November 20.  The event is both in-person and virtual.  The webinar is free, and CPE credits are available to attendees who meet the requirements. 

This event will feature a postelection reaction panel, delivering cutting-edge analysis and fresh perspectives. Panelists will explore how shifts in the administration and Congress will affect tax priorities in 2025.

Panelists include Caroline Harris, Monisha Santamaria (KPMG), Chris Towner, and Tax Analysts' Contributing Editor Martin A. Sullivan. The moderator is Tax Analysts’ President and CEO, Cara Griffith.

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Shanske: Loper Bright, (Increased?) State Capacity, And (Perhaps?) Pyrrhic Taxpayer Victories

Darien Shanske (UC-Davis; Google Scholar), Loper Bright, (Increased?) State Capacity, and (Perhaps?) Pyrrhic Taxpayer Victories, 113 Tax Notes St. 355 (Aug. 5, 2024):

This short essay is a first consideration of how Loper Bright might impact state tax administration.  It argues that the indirect impact might be significant if, for example, states with income taxes end up conforming with poor post-Loper Bright regulations or judicial decisions. 

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Schwidetzky: Reforming Self-Employment Taxes

Walter D. Schwidetzky (Baltimore), Reforming Self-Employment Taxes, 185 Tax Notes Fed. 461 (Oct. 21, 2024):

In this report, Schwidetzky proposes reforms to address tax avoidance and other problems with self-employment tax.

Introduction
Taxpayers for decades have been seeking ways to avoid self-employment taxes. By self-employment taxes, I mean the taxes imposed by section 1401, which are more commonly known as Social Security taxes, Medicare taxes, and one of two so-called Obamacare taxes. Analogous provisions for employers and employees are contained in sections 3101 and 3111.

Obamacare taxes were added by the Affordable Care Act (P.L. 111-148) and the associated Health Care and Education Reconciliation Act (P.L. 111-152). One Obamacare tax is meant to fall on self-employment and employment income (and, in fact, is a type of Medicare tax). The other is (in the main) assessed on net investment income (NII) and thus is neither a self-employment tax nor an employment tax, but it is inextricably intertwined with those taxes. It seems clear that the two Obamacare taxes together were meant to apply to almost all taxable income of individuals (including income allocated to them by partnerships and S corporations), provided the incomes exceed certain thresholds. But the way these taxes are designed, taxpayers can potentially avoid both of them.

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Mazur & Thimmesch: Transforming Tax Communications With Large Language Models

Orly Mazur (SMU; Google Scholar) & Adam Thimmesch (Nebraska; Google Scholar), Transforming Tax Communications With Large Language Models, 185 Tax Notes Fed. 757 (Oct. 28, 2024):

In this installment of Academic Perspectives on SALT, Mazur and Thimmesch explore how to improve the efficiency and equity of tax administration through the strategic use of large language models and related artificial intelligence.

Conclusion
LLMs have the potential to significantly transform tax communications by simplifying taxpayer interactions, enhancing the efficiency of tax communications’ personalized support, and making tax agency resources more widely accessible. This article has highlighted just a few of the ways LLMs can revolutionize the IRS and state tax agencies’ communication functions — from enhancing external communications with taxpayers to improving internal training and promoting fairness.

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Zelenak: Why Nix Tip Tax Now?

Lawrence A. Zelenak (Duke; Google Scholar), Why Nix Tip Tax Now?, 185 Tax Notes Fed. 237 (Oct. 14, 2024):

In this article, Zelenak explores why — more than 100 years after a Treasury regulation declared tips taxable — proposals to exempt tips from federal income tax are only now politically viable, and he examines the design challenges faced by the drafters of proposals to exempt tips.

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2024 Tax Notes Student Writing Competition Winner: Nicholas Lott (BYU)

Nicholas Lott (J.D. & MAcc 2025, BYU), New York, Amazon, and Company-Specific Tax Incentives: A Microcosm of a National Problem, 184 Tax Notes Fed. 2525 (Sept. 23, 2024):

In this article, Lott centers on the polarizing company-specific tax incentive that New York offered Amazon to entice it to construct its second headquarters in Long Island City. Through the lens of equity, efficiency, and simplicity, this article analyzes New York and Amazon’s agreement and then extrapolates the analysis to a broader analysis of all company specific tax incentives. 

Nicholas Lott is a J.D./MAcc candidate at Brigham Young University and an associate editor at the BYU Law Review. He works in-house at SnapOne, a NASDAQ-listed technology firm, and upon graduation will join the legal team at Vinson & Elkins in Houston, Texas. When Lott is not working or studying, he enjoys spending time with his wife and preparing for the imminent arrival of their daughter.

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Fleming, Peroni & Shay: The U.S. Tax System’s Curious Embrace Of Manufacturing Job Losses

J. Clifton Fleming Jr. (BYU; Google Scholar), Robert J. Peroni (Texas) & Stephen E. Shay (Boston College; Google Scholar), The U.S. Tax System’s Curious Embrace of Manufacturing Job Losses, 185 Tax Notes Fed. 35 (Oct. 7, 2024):

In this article, the authors explain how the subpart F regime and the global intangible low-taxed income regime together contribute to a long-running decline in domestic manufacturing employment, and they argue that the best approach to fixing the problem is worldwide taxation without deferral, not pillar 2.

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Challenging The Johnson Amendment: What SAFE SPACE Gets Right — And Wrong

Benjamin Leff (American; Google Scholar), Challenging the Johnson Amendment: What SAFE SPACE Gets Right — and Wrong, 185 Tax Notes Fed. 51 (Oct. 7, 2024):

In this article, Leff argues that the IRS’s interpretation of section 501(c)(3)’s prohibition on campaign intervention (the Johnson Amendment) is unconstitutional, as claimed in a recent Tax Court petition, but that the petitioner in that case unnecessarily asserts a dangerously broad strategy for vindicating charities’ free speech rights.

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Kamin: The Macroeconomic Context For A 2025 Tax Deal

David Kamin (NYU), The Macroeconomic Context for a 2025 Tax Deal, 184 Tax Notes 2673 (Sept. 30, 2024):

In this article, Kamin argues that 2025 looks like a year in which fiscal consolidation would be appropriate given the macroeconomic context for the expiring provisions of the Tax Cuts and Jobs Act, and he explains that fiscal consolidation would preferably come in the form of at least fully financing tax cut extensions. But he adds that allowing the tax cuts to expire should be seen as an economically viable alternative if a deal meeting key tax reform goals is not available.

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Harpaz: Can U.N. Framework Tax Convention Bridge The North-South Divide?

Assaf Harpaz (Georgia; Google Scholar), The U.N. Framework Tax Convention: Can It Bridge the North-South Divide?, 115 Tax Notes Int’l 1779 (Sept. 16, 2024):

The United Nations recently concluded the second session of negotiations on terms of reference for a framework convention on international tax cooperation. The framework convention presents an opportunity to multilaterally address pressing global tax issues. Its goal is to “strengthen international tax cooperation and make it fully inclusive and more effective.”

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State Conformity To GILTI Is A Good Idea (A Defense of Minnesota)

Peter D. Enrich (Northeastern), Michael Mazerov (Center on Budget and Policy Priorities), Darien Shanske (UC-Davis; Google Scholar) & Dan Bucks (Public Revenues Consulting), State Conformity to GILTI is a Good Idea (A Defense of Minnesota), 110 Tax Notes St. 287 (Oct. 23, 2023):

SALT in the Public Interest presents government and academic perspectives on state and local tax issues in a roundtable discussion format featuring former Multistate Tax Commission Executive Director Dan R. Bucks; Peter D. Enrich, professor emeritus at the Northeastern University School of Law; Michael Mazerov, senior fellow at the Center on Budget and Policy Priorities; and professor Darien Shanske of the University of California, Davis, School of Law (King Hall). Tax Notes State senior editor Doug Sheppard moderates the discussion.

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UF Tax Incubator: Complexities, Discontinuities, And Unintended Consequences Of U.S. International Tax Rules

UF Tax Incubator: Complexities, Discontinuities, and Unintended Consequences of US International Tax Rules: Options for Change (American Enterprise Institute Symposium (June 17-18, 2024):

• Forward (p. 1)
• Potential Changes to Section 367 and the Associated Treasury Regulations (p. 11)
• Considerations for Reforming the U.S. Source of Income Rules (p. 27)
• U.S. Subsidiaries of Foreign-Based MNEs — BEAT and Section 163 (p. 43)
• Considerations Relating to CFC Stock Ownership and Allocation of Subpart F Income (p. 65)
• Taxation of Foreign Branches (p. 73)
• Considerations for Reforming the U.S. Transfer Pricing Rules (p. 91)
• U.S. Ownership of Foreign Stock: Dividends and Gains on Sale (p. 111)
• Taxation of Foreign-Derived Intangible Income (p. 127)
• Subpart F and GILTI Recommendations (p. 145)
• Taxation of Foreign Income Earned by Individuals and Minority Shareholders of Passive Foreign Corporations (p. 161)
• FTC Proposals, Part I: Creditable Foreign Taxes (p. 179)
• FTC Proposals, Part II: TCJA White Paper (p. 201)

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Tax Notes’ Taxing Issues Webinar: TCJA’s Expiration: Navigating The SALT Cap Debate

(Sponsored post) Tax Notes will present TCJA’s Expiration: Navigating the SALT Cap Debate on September 26.  The webinar is free and CPE credits are available to attendees who meet the requirements. 

The expiration of key provisions of the Tax Cuts and Jobs Act will have implications beyond federal tax policy, particularly on the debate around the cap on the itemized deduction for state and local taxes. Arguments for letting the SALT cap expire emphasize its unfairness to some taxpayers, while advocates for extending or modifying the cap cite its role in helping fund federal tax cuts and maintaining fiscal discipline at the state level.

What are the burdens the cap places on residents of high-tax states like California, New York, Connecticut, and New Jersey?

If the SALT cap is allowed to expire, how will that affect the passthrough entity election? If the cap is extended, what issues remain unresolved with that election?

Panelists include Nikki E. Dobay (Greenberg Traurig), Kathleen K. Wright (Golden Gate University), and James W. Wetzler (formerly at Deloitte Tax). The moderator is Tax Analysts’ President and CEO, Cara Griffith.

Thomas: Here’s How Harris’s Standard Business Deduction Could Work

Kathleen DeLaney Thomas (North Carolina; Google Scholar), Here’s How Harris’s Standard Business Deduction Could Work, 184 Tax Notes Fed. 2521 (Sept. 23, 2024):

In this article, Thomas explains how Vice President Kamala Harris’s proposed standard deduction for small businesses could be implemented, emphasizing that it would simplify tax filing for qualifying businesses.

[A] standard business deduction could convert the process of filing taxes from an hours- or dayslong affair to a matter of minutes.

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