Paul L. Caron
Dean





Saturday, February 24, 2024

Soled: The Gift Tax And The Tax Gap

Jay A. Soled (Rutgers; Google Scholar), The Gift Tax and the Tax Gap, 182 Tax Notes Fed. 1047 (Feb. 5, 2024):

Tax Notes Federal (2022)There is ample evidence that the nation’s gift tax revenue is ravaged by taxpayer noncompliance, thereby enlarging the overall federal tax gap. In a nutshell, taxpayers often make gifts that exceed the gift tax annual exclusion, yet they fail to report this information to the IRS, and the agency lacks the resources and ability to identify those derelictions. The result is that the nation’s coffers suffer.

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February 24, 2024 in Scholarship, Tax, Tax Analysts, Tax Scholarship | Permalink

Thursday, February 22, 2024

Generative AI For Tax: Looking Back, Looking Ahead

Benjamin Alarie (Osler Chair in Business Law, University of Toronto; CEO, Blue J Legal),), Generative AI for Tax: Looking Back, Looking Ahead, 182 Tax Notes Fed. 1069 (Feb. 5, 2024):

Tax Notes Federal (2022)This article canvases the highlights of what has been going on with generative AI over this past year. It outlines the main developments ushered in by the large technology players for the development and commercialization of AI in 2023 and then, more importantly for the purposes of tax professionals, offers a quick rundown of some of the principal developments in the world of tax law specifically for generative AI in 2023, particularly regarding tax analysis. It then forecasts what lies ahead for generative AI in tax in 2024.

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February 22, 2024 in Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Wednesday, February 21, 2024

Sarin, Summers, Goldberg & Samuels: Tax Reform Project — Seeking Experts’ Ideas For A Better Tax Code

Natasha Sarin (Yale), Lawrence Summers (Harvard), Fred Goldberg, Jr. (Skadden) & Leslie B. Samuels (Cleary Gottlieb), Tax Reform Project: Seeking Experts’ Ideas for a Better Tax Code, 182 Tax Notes Fed. 1027 (Feb. 5, 2024): 

Tax Reform ProjectIn this article, the authors announce the Tax Reform Project and invite tax experts to submit their ideas for improving the tax system to the project’s website for inclusion in a “practitioners’ green book” that will aid the development of tax policy in Washington. ...

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February 21, 2024 in Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Saturday, February 17, 2024

Avi-Yonah Posts Three Tax Papers On SSRN

Reuven S. Avi-Yonah (Michigan; Google Scholar), Pillar 2 and the United States: What’s Next, 182 Tax Notes Fed. 1269 (Jan. 29, 2024):

In this installment of Reflections With Reuven Avi-Yonah, Avi-Yonah examines what’s next for the United States and U.S. multinationals as pillar 2 becomes a reality.

Reuven S. Avi-Yonah (Michigan; Google Scholar), Could Moore Have Been Mooted?, 112 Tax Notes Int'l 1752 (Dec. 18, 2023):

In this article, Avi-Yonah argues that the government could have prevented Moore from going before the Supreme Court by issuing the Moores a refund for the contested amount before they applied for certiorari.

Reuven S. Avi-Yonah (Michigan; Google Scholar) & Ariel Siman (Michigan), Taxation and Corporate Governance:

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February 17, 2024 in Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Wednesday, February 14, 2024

Burke: How Abusive Was Tribune Media’s Disguised Sale?

Karen C. Burke (Florida), How Abusive Was Tribune Media’s Disguised Sale?, 182 Tax Notes Fed. 855 (Jan. 29, 2024):

In 2009 Tribune Media Co. deliberately structured the disposition of its controlling interest in the Chicago Cubs (the Cubs transaction) to fit within the debt-financed exception to the partnership disguised sale rules. The linchpin of the Cubs transaction was Tribune’s guarantee of the partnership’s senior debt. Had Tribune disposed of the Cubs assets in an outright sale, it would have recognized significant gain. In 2016 the government assessed a deficiency, claiming that Tribune’s guarantee should be disregarded because the likelihood of payment was too remote. In 2021 the Tax Court held that Tribune had entered into a bona fide guarantee and “the fact that having to fulfill the guarantee is remote is not sufficient to disregard it.”

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February 14, 2024 in Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Tuesday, February 13, 2024

Check-the-Box Regulations After Pillar Two

Carol Wang (Joint Committee on Taxation), Check-the-Box Regulations After Pillar Two, 112 Tax Notes Int'l 1501 (Dec. 11, 2023):

Tax-notes-internationalSince December 1996, domestic and foreign “eligible entities” have been able to elect their tax classification for U.S. federal income purposes. As a result, eligible entities may elect to be a corporation subject to entity-level tax, a partnership that is not subject to entity-level tax but rather flows through the tax to its owners, or an entity disregarded as separate from its owner (“DRE”). DRE’s that are owned by individuals are treated as sole proprietorships and DRE’s that are owned by corporations or partnerships are treated as a branch or division of that corporation or partnership. They are ignored for U.S. tax purposes and deemed to be the same taxable entity as their regarded owner.

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February 13, 2024 in Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Wednesday, February 7, 2024

Clarke: The Overlooked Excise Power In Moore

Conor Clarke (Washington University; Google Scholar), Moore: The Overlooked Excise Power, 181 Tax Notes Fed. 1759 (Dec. 4, 2023):

Tax-notes-federalMoore v. United States, a constitutional challenge to the mandatory repatriation tax in the Tax Cuts and Jobs Act, has been litigated almost entirely as a case about the scope of the Sixteenth Amendment. I present an alternative theory: The repatriation tax doesn’t need to flow from the Sixteenth Amendment power to tax “incomes,” because it flows from Congress’s Article I power to lay and collect “excises.” The Supreme Court has long upheld Congress’s power to tax business earnings and activities as a valid exercise of the excise power, and the mandatory repatriation tax fits within that framework. 

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February 7, 2024 in Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Tuesday, February 6, 2024

Fox & Liscow: No More Tax-Free Lunch for Billionaires — Closing The Borrowing Loophole

Edward G. Fox (Michigan; Google Scholar) & Zachary Liscow (Yale; Google Scholar), No More Tax-Free Lunch for Billionaires: Closing the Borrowing Loophole, 182 Tax Notes Fed. 647 (Jan. 22, 2024):

Tax Notes Federal (2022)In this article, Fox and Liscow propose a tax on billionaires that would apply to borrowing against assets and explain how it could be designed and how it relates to other wealth tax proposals, as well as potential critiques.

Conclusion
We face high inequality and strong revenue needs in the United States.

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February 6, 2024 in Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Thursday, February 1, 2024

Applications Are Open For Two ABA Tax Section Fellowships

ABA Tax Section, Tax Analysts Public Service Fellowship:

FellowshipThe application for the 2024-2026 Tax Analysts Public Service Fellowship is now available! 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. The applications will be reviewed on a rolling basis beginning April 1, 2024. Submit completed applications (and any questions) to [email protected].

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February 1, 2024 in Legal Education, Tax, Tax Analysts, Tax Daily | Permalink

Wednesday, January 31, 2024

Avi-Yonah On Moore

Reuven S. Avi-Yonah (Michigan; Google Scholar), What Is the Best Candidate for a Post-Moore Constitutional Challenge?, 182 Tax Notes Fed. 105 (Jan. 1, 2024):

Tax Notes Federal (2022)In this first installment of Reflections With Reuven Avi-Yonah, Avi-Yonah evaluates potential areas of future constitutionality challenges in the aftermath of Moore.

Reuven S. Avi-Yonah (Michigan; Google Scholar), Effects From Moore: Does the Corporate Tax Require Realization?, 182 Tax Notes Fed. 661 (Jan. 22, 2024):

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January 31, 2024 in Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Wednesday, January 24, 2024

Avi-Yonah: 2023 Was A Remarkable Year For The IRS In Tax Litigation

Reuven S. Avi-Yonah (Michigan; Google Scholar), Why Did the IRS Win? A Remarkable Year in Tax Litigation (Part 1), 182 Tax Notes Fed. 307 (Jan. 8, 2024):

Tax Notes Federal (2022)In this installment of Reflections With Reuven Avi-Yonah, part 1 of a two-part series, Avi-Yonah examines the quickly evolving pattern of successful litigation for the IRS, focusing on key cases from the past year.

Reuven S. Avi-Yonah (Michigan; Google Scholar), Why Did the IRS Win? A Remarkable Year in Tax Litigation (Part 2), 182 Tax Notes Fed. 483 (Jan. 15, 2024):

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January 24, 2024 in Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Monday, January 22, 2024

Thomas: Improving The Tax System For Independent Contractors With Quarterly 1099s

Kathleen DeLaney Thomas (North Carolina; Google Scholar), Improving the Tax System for Independent Contractors: Quarterly 1099s, 182 Tax Notes 79 (Jan. 1, 2024):

Tax Notes Federal (2022)In this article, Thomas proposes a new quarterly form sent to independent contractors that would inform them of their quarterly earnings and their obligation to remit estimated taxes on that income, easing the compliance burden on those taxpayers and helping decrease the tax gap.

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January 22, 2024 in IRS News, Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Tuesday, January 9, 2024

Hemel: Tax Regulations And The New Cost-Benefit Analysis

Daniel J. Hemel (NYU; Google Scholar), Tax Regulations and the New Cost-Benefit Analysis, 181 Tax Notes Fed. 1977 (Dec. 11, 2023): 

Tax-notes-federalThe White House Office of Management and Budget released a much-anticipated revision of its guidance to federal agencies regarding regulatory cost-benefit analysis — a document known as Circular A-4 — on November 9, 2023. The new Circular A-4, which supersedes the 2003 version, encourages agencies to analyze the distributional effects of proposed regulatory actions as part of their cost-benefit analysis and provides detailed instructions for how to do so. If agencies heed the new Circular A-4’s guidance, distributional considerations will become an increasingly important element of regulatory decision-making across the federal executive branch.

Yet there is at least one area of regulation in which the new Circular A-4 won’t have any immediate effect: tax.

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January 9, 2024 in Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Tuesday, January 2, 2024

Tax Notes Federal 2023 Persons Of The Year: Kathleen And Charles Moore

Marie Sapirie, Persons of the Year: The Moores: The Constitution, Realization, and Two Tax Everymen, 181 Tax Notes Fed. 2091 (Dec. 18, 2023):

Tax Notes Federal (2022)Every tax practitioner and many readers of editorial pages will recognize their names today, but that wasn’t true until recently. For their role as petitioners in the most highly analyzed and anticipated Supreme Court tax case of the year, Kathleen and Charles Moore are the Tax Notes Federal People of the Year. ...

The Moores are among the few Tax Notes Federal People of the Year in recent years who aren’t tax professionals or elected officials. They’re Everyman taxpayers who have taken the stage — by their admission, reluctantly — in the increasingly worldwide drama of modern tax law. Kathleen recounted in the video her memory of receiving the IRS’s deficiency letter, an experience shared by many taxpayers each year: “Well, it’s never good to get something in the mail from the IRS. It makes your heart pound.” And then she admitted that she wasn’t sure she wanted to be a litigant against the IRS. Certainly, very few would relish that role. ...

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January 2, 2024 in Tax, Tax Analysts, Tax Daily, Tax News | Permalink

Friday, December 29, 2023

Seven Tax Experts: The Biggest Implications Of Moore

The Biggest Implications of Moore, 181 Tax Notes Fed. 2147 (Dec. 18, 2023):

Supreme Court (Current)In this installment of the Star Forum, experts answer the following question: What do you see as the biggest implications of Moore, even though we don’t know for sure how the Supreme Court will decide the case? (The authors drafted their initial essays — and reached their conclusions — without seeing each other’s contributions.)

Conor Clarke (Washington University; Google Scholar), We Are All Tax Historians Now, 181 Tax Notes Fed. 2147 (Dec. 18, 2023):

The opposing parties in Moore obviously don’t agree on much, but on one point they see eye to eye: History can help determine the constitutionality of a tax law.

Patrick Driessen (former government economist and revenue estimator), Tax Mandates, Leverage, and Whipsaws, 181 Tax Notes Fed. 2149 (Dec. 18, 2023):

The traction of the Moores’ challenge to the TCJA’s taxation of pre-2018 deferred foreign earnings has been surprising, even if it is “just” a scarecrow to ward off accrual and wealth taxes (that, too, would seem to me a bad outcome). Also, the TCJA’s MRT itself was surprising seven years ago. Either I surprise easily, or tax policy has become more suspenseful.

Michael J. Graetz (Columbia), What I Learned at the Oral Argument in Moore, 181 Tax Notes Fed. 2151 (Dec. 18, 2023):

In The Power to Destroy: How the Antitax Movement Hijacked America, my new book, I describe how, during this last half-century, reducing taxes at the top and curbing the government’s ability to raise the revenues necessary to fund government spending became the linchpin holding together disparate elements of the Republican coalition. The antitax movement, I claim, is “the most overlooked social and political movement in recent American history.” Activist members of that movement have now enlisted the Supreme Court — by attacking as unconstitutional an obscure international tax provision, enacted as a crucial element of a Republican tax law — to block their real target: Democratic proposals to increase taxes on the rich. Leaving the oral argument, I marveled at the skill with which the movement successfully recruited a Supreme Court majority of longtime Republican conservatives into their project of limiting taxes on wealthy Americans.

Daniel J. Hemel (NYU: Google Scholar), Winning by Losing, 181 Tax Notes Fed. 2153 (Dec. 18, 2023):

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December 29, 2023 in Tax, Tax Analysts, Tax Daily, Tax News | Permalink

Thursday, December 28, 2023

Blue J: AI And The Future Of Tax Avoidance

Benjamin Alarie (Osler Chair in Business Law, University of Toronto; CEO, Blue J Legal), AI and the Future of Tax Avoidance, 181 Tax Notes Fed. 1809 (Dec. 4, 2023):

Tax Notes Federal (2022)This essay directly addresses the significant shift artificial intelligence (AI) is bringing to tax avoidance. AI is revolutionizing the field, previously reliant on expert human navigation, by enabling more efficient tax planning within legal parameters and empowering administrators to detect and counteract avoidance strategies. The distinction between strategic tax planning and abusive avoidance is becoming clearer thanks to AI, challenging tax professionals to reassess their roles and responsibilities in this evolving landscape.

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December 28, 2023 in Scholarship, Tax, Tax Analysts, Tax Scholarship | Permalink

Wednesday, December 27, 2023

Mason: The Advocate General’s Opinion In Apple—Two Steps Forward, One Step Back

Ruth Mason (Virginia; Google Scholar), The Advocate General’s Opinion in Apple: Two Steps Forward, One Step Back, 112 Tax Notes Int'l 1315 (Dec. 4, 2023):

Tax-notes-internationalIn this article, Mason reviews the advocate general opinion in the case against Ireland for granting illegal state aid to Apple. Advocate General Giovanni Pitruzzella urged Europe’s highest court to vacate Ireland and Apple’s win in the court below and remand the case for what he described as legal errors. She also considers whether Apple could fit into the Gibraltar exception described by the Court of Justice in its Fiat decision.

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December 27, 2023 in Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Thursday, December 14, 2023

Shaheen, Avi-Yonah & Kadet: Is The UTPR A 100 Percent Tax On A Deemed Distribution?

Fadi Shaheen (Rutgers; Google Scholar), Is the UTPR a 100 Percent Tax on a Deemed Distribution?, 181 Tax Notes Fed. 481 (Oct. 16, 2023):

Tax-notes-federalThis article floats the proposition that from a U.S. tax perspective, the UTPR is the mathematical, conceptual, and legal equivalent of a 100 percent withholding tax on a deemed distribution by the UTPR entity, and addresses questions that would follow regarding the desirability of such a confiscatory tax and its interaction with tax treaties.

Reuven S. Avi-Yonah (Michigan; Google Scholar), The UTPR Reconsidered: A Response to Fadi Shaheen, 181 Tax Notes Fed. 687 (Oct. 23, 2023):

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December 14, 2023 in Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Wednesday, November 29, 2023

Avi-Yonah Posts Two International Tax Papers On SSRN

Reuven Avi-Yonah (Michigan; Google Scholar) has posted two international tax papers on SSRN:

SSRNThe First US Tax Treaty and Its Influence

This paper discusses the first US tax treaty concluded with France in 1932 and ratified in 1935. This treaty is interesting because it follows the League of Nations model of 1928 but with significant differences. It is also a treaty between a global jurisdiction and (at the time) a purely territorial one. This meant that while reductions in French taxes benefited the US fisc because they resulted in lower foreign tax credits (but the overall tax level was the same), French investors into the US could derive some types of income (e.g., royalties) without any tax being imposed by either country. This may also explain why the treaty was more limited in scope than the League of Nations model. But the main importance of the treaty is because it is the first ever appearance of the Arms Length Principle in international tax, which had a profound influence.

The UTPR Reconsidered: A Response to Fadi Shaheen

In a letter to the editor [Much Ado: Why the United States Should Calm Down About DSTs], 181 Tax Notes Fed. 1235 (Nov. 13, 2023)], Reuven S. Avi-Yonah rebuts criticism of the UTPR that Fadi Shaheen made in a recent article [Is the UTPR a 100 Percent Tax on a Deemed Distribution?, 181 Tax Notes Fed. 481 (Oct. 16, 2023)].

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November 29, 2023 in Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Tuesday, November 28, 2023

Thorndike: Moores Lean On 1916 Tax Expert To Argue No Realization Means No Income

Joseph J. Thorndike (Tax Analysts), Tax History: Moores Lean on 1916 Tax Expert to Argue No Realization Means No Income, 181 Tax Notes Fed. 1356 (Nov. 20, 2023):

Tax Notes Federal (2022)Apparently, Charles G. Moore and Kathleen F. Moore are in thrall to a certain Columbia University economist from the early 20th century. Edwin R.A. Seligman is a big player in Moore v. United States, No. 22-800 — no small feat for a scholar who’s been moldering in a Brooklyn cemetery these past 84 years.

Still, Seligman’s prominence in the Moore case is worthy of note, even if Keynes would have found it predictable. The petitioners have cited Seligman repeatedly, using him to support their claim that unrealized income is not really income at all — at least not as far as the 16th Amendment is concerned.

As well they should: The Moores could hardly have asked for a better historical champion. If you’re trying to argue that the original meaning of the 16th Amendment hinges on the concept of realization, then Seligman is your man.

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November 28, 2023 in New Cases, Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Tuesday, November 21, 2023

Exclusive Article Submission Window For The Tax Lawyer

ABA Tax Lawyer (2022)The Tax Lawyer is offering an exclusive submission window for articles to be published in the Spring issue of the Tax Lawyer through December 1, 2023. If you’ve got a completed or almost completed draft of an article on any tax issue of 12,000-35,000 words, please submit it to Editor, Publications, at [email protected]. You can also submit via Scholastica if you prefer. Your article will be published by May 2024.

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November 21, 2023 in ABA Tax Section, Law Review Rankings, Legal Education, Scholarship, Tax, Tax Analysts, Tax Daily, Tax Rankings, Tax Scholarship, W&L Tax Journal Rankings | Permalink

Thursday, November 16, 2023

Discriminatory Taxes And Congress: Do As I Say, Not As I Do

Laura Snyder (President, Stop Extraterritorial American Taxation (SEAT); Board of Directors, Association of Americans Resident Overseas (AARO)), Discriminatory Taxes and Congress: Do as I Say, Not as I Do, 180 Tax Notes Fed. 1283 (Aug. 21, 2023):

Tax-notes-federalFor decades, overseas Americans and others have appealed to Congress to act regarding the U.S. extraterritorial tax system. The long-standing system discriminates against persons of U.S. nationality living outside the United States, subjecting them to a tax regime that is more burdensome and punitive than for persons residing in the United States (of any nationality) and persons residing outside the United States who are not U.S. nationals. But their appeals are disregarded. No action to alleviate the situation has ever been taken (or, with few exceptions, even proposed), and nearly all members of Congress remain silent on the issue.

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November 16, 2023 in Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Wednesday, November 15, 2023

Graetz: To Avoid The Moore Morass, The Court Should DIG It (Dismiss As Improvidently Granted)

Michael J. Graetz (Columbia), To Avoid the Moore Morass, the Court Should DIG It — But It Probably Won’t, 181 Tax Notes Fed. 1253 (Nov. 13, 2023):

Tax-notes-federalIn this article, Graetz examines several of the briefs filed in Moore and argues that regardless of who wins the case, there will be no good outcomes if the Supreme Court holds that realization is a constitutional requirement. This article is based on a presentation on Moore to the International Tax Policy Forum in Washington on October 20. It has been updated to reflect amicus briefs in support of the government that were filed by October 23.

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November 15, 2023 in Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Tuesday, November 14, 2023

Blue J: Will AI Replace Tax Practitioners?

Benjamin Alarie (Osler Chair in Business Law, University of Toronto; CEO, Blue J Legal) et al., Will AI Replace Tax Practitioners?, 181 Tax Notes Fed. 855 (Oct. 30, 2023):

Tax Notes Federal (2022)In the evolving legal landscape created by the advancement of artificial intelligence, we confront a worrying question: Will tax practitioners eventually find themselves sidelined by this technological revolution? There is no denying that AI’s capabilities can expedite many of the core tasks we tax professionals perform, potentially pushing our traditional roles toward obsolescence and prompting a sea change in how professional services firms operate. Yet we should recognize the intrinsic value tax practitioners bring — our ability to negotiate, the human touch of empathy, the ethical compass, and the ability to make complex inferences and connections between various tax provisions. These aspects reflect a nuanced art not (yet) replicated by machines. Moreover, a pure reliance on AI is not without potential pitfalls. That reliance risks reinforcing preexisting biases, poses privacy challenges, and could undermine the fidelity of tax planning. Ultimately, we envision a future in which tax practitioners will be instrumental in shaping AI tools and regulations in the tax context. It is not so much that tax practitioners will be replaced by AI but that tax practitioners who leverage AI will outpace and displace those who choose not to adopt it.

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November 14, 2023 in Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Wednesday, November 1, 2023

Shaheen: Is The UTPR A 100 Percent Tax On A Deemed Distribution?

Fadi Shaheen (Rutgers; Google Scholar), Is the UTPR a 100 Percent Tax on a Deemed Distribution?, 181 Tax Notes Fed. 481 (Oct. 16, 2023):

Tax Notes Federal (2022)In this article, Shaheen floats the proposition that from a U.S. tax perspective, the UTPR is the mathematical, conceptual, and legal equivalent of a 100 percent withholding tax on a deemed distribution by the UTPR entity, and he addresses questions that would follow regarding the desirability of such a confiscatory tax and its interaction with tax treaties. ...

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November 1, 2023 in Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Tuesday, October 31, 2023

Borden: Like-Kind Exchange Deadlines That Fall On Weekends And Holidays

Bradley T. Borden (Brooklyn; Google Scholar), Like-Kind Exchange Deadlines That Fall on Weekends and Holidays, 181 Tax Notes Fed. 261 (Oct. 9, 2023):

Tax Notes Federal (2022)In this article, Borden examines several court decisions that have extended section 7503 deadlines to the next business day, and he argues that the same extension applies to the deadlines under section 1031 for like-kind exchanges of property.

The Predicament
Every so often, exchangers find themselves in a predicament that raises the question whether the section 1031 45-day identification and 180-day exchange periods can be extended if they fall on a weekend or holiday.

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October 31, 2023 in Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Thursday, October 26, 2023

Deese & Kamin: Principles For The 2025 Tax Debate

Brian Deese (MIT) & David Kamin (NYU), Principles for the 2025 Tax Debate, 181 Tax Notes Fed. 443 (Oct. 16, 2023):

Tax Notes Federal (2022)In this article, Deese and Kamin identify core principles for evaluating proposals to address the tax cuts expiring at the end of 2025 and to reform the code more broadly, and they place the 2025 debate in the context of a multidecade strategy to reduce the U.S. revenue base through regressive tax cuts.

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October 26, 2023 in Scholarship, Tax, Tax Analysts, Tax Scholarship | Permalink

Wednesday, October 18, 2023

Zelenak: Reading The Taxpayers’ Brief In Moore

Lawrence A. Zelenak (Duke; Google Scholar), Reading the Taxpayers’ Brief in Moore, 181 Tax Notes Fed. 101 (Oct. 2, 2023):

Tax Notes Federal (2022)In this article, Zelenak explains that the strategy of the taxpayers’ brief in Moore is to distinguish the mandatory repatriation tax from other provisions that arguably violate Eisner v. Macomber, rather than to claim that those other provisions are also unconstitutional; he also analyzes several serious weaknesses in the brief’s arguments.

Other briefs of note:

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October 18, 2023 in New Cases, Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Tuesday, October 17, 2023

Hellwig: Hoops And The Tax Treatment Of Nonqualified Deferred Compensation Obligations Transferred In The Sale Of Employer’s Assets

Brant J. Hellwig (NYU), Exploring Hoops, 181 Tax Notes Fed. 89 (Oct. 2, 2023):

Tax Notes Federal (2022)The Seventh Circuit recently issued its opinion in Hoops LP v. Commissioner [77 F.4th 557 (7th Cir. 2023)] concerning the tax treatment of nonqualified deferred compensation obligations that are transferred in connection with the sale of the employer’s assets. The appellate court affirmed the determination of the Tax Court [T.C. Memo. 2022-9] that, despite the inclusion of the deferred compensation obligations in the amount realized by the original employer upon the sale of its assets, section 404(a)(5) requires the original employer to defer its deduction for the deferred compensation to when the compensation is actually paid by the purchaser and included in the employee’s gross income. ...

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October 17, 2023 in New Cases, Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Saturday, October 14, 2023

Rosenthal: Moore Could Invalidate Decades Of Tax Rules

Steven M. Rosenthal (Tax Policy Center), Moore Could Invalidate Decades of Tax Rules, 181 Tax Notes Fed. 285 (Oct. 9, 2023):

Tax Notes Federal (2022)Former House Speaker Paul Ryan, R-Wis., recently warned that a “lot of the tax code would be unconstitutional” if the Supreme Court rules for the petitioners in Moore. In Moore, U.S. shareholders in a “controlled” foreign corporation object to having been taxed on income they had not yet received as a cash distribution. They hope to breathe new life into Macomber, a 1920 Supreme Court decision requiring income be “realized” to be taxed, even though that decision has been eroded by later rulings by the Court (as recognized by lower courts and commentators) over the ensuing century.

I share Ryan’s concerns, particularly for tax legislation that has been enacted to reflect income more accurately in the absence of a sale or other disposition. Much of that legislation was in response to complex international and financial structuring designed to facilitate tax avoidance. The IRS has administered this tax legislation and taxpayers have followed it for decades, with few difficulties by either.

These laws should survive the Court’s review.

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October 14, 2023 in Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Thursday, October 12, 2023

Blue J: Automated Tax Planning — Who’s Liable When AI Gets It Wrong?

Benjamin Alarie (Osler Chair in Business Law, University of Toronto; CEO, Blue J Legal), et al., Automated Tax Planning: Who’s Liable When AI Gets It Wrong?, 180 Tax Notes Fed. 2297 (Sept. 25, 2023):

Tax Notes (2021)Considering the continued proliferation of and rapid advancement in artificial intelligence technology, tax professionals are increasingly finding themselves confronted with novel accountability questions. If I render erroneous tax advice based on the output of an AI, to what extent will I be held professionally responsible? How do I navigate situations in which the AI’s tax analysis differs from my own, even if I struggle to document or even explain why I expect a different outcome? As AI becomes more powerful and is responsible for informing a greater number of important decisions, the challenge of assigning and apportioning this liability becomes progressively more difficult.

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October 12, 2023 in Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Wednesday, October 11, 2023

Yin: The Supreme Court's Misinterpretation Of The FBAR Statute

George K. Yin (Virginia), Of Blind Men, Elephants, and the Supreme Court’s Bittner Error, 180 Tax Notes Fed. 2275 (Sept. 25, 2023):

Tax Notes Federal (2022)This brief case comment explains how the Supreme Court’s very narrow hunt for individual clues in Bittner v. United States, 598 U.S. __ (2023), led it to misinterpret a statute penalizing certain persons for failing to report properly their foreign bank accounts. Had the Court instead removed its blinders, examined the full elephant in the case—the entirety of the short and straightforward statutory provision—considered what it was trying to accomplish, and applied a dollop of common sense, the answer it sought would have been readily apparent.

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October 11, 2023 in Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Tuesday, October 10, 2023

Avi-Yonah: Moore Questions Than Answers

Reuven Avi-Yonah (Michigan; Google Scholar), Moore Questions Than Answers, 180 Tax Notes Fed. 2256 (Sept. 25, 2023):

Tax Notes Federal (2022)The revelation that Charles Moore was a director in KisanKraft, the Indian controlled foreign corporation at the heart of the Moore case, throws significant doubt on the story told by the Moores in their court filings. ... Their story is that Charles Moore met Ravi Agrawal when they were both working for Microsoft in 1991, that Ravi founded KisanKraft in 2006 with the Moores as minority (11 percent) shareholders, and that since then Ravi lived in India and ran KisanKraft while the Moores were hapless passive investors. ...

Moore, with its $40,000 investment and $14,000 tax liability, was tailor-made to be a vehicle for a constitutional challenge to section 965. Clearly, the Moores are more sympathetic plaintiffs than the mega corporations who make up most of the taxpayers affected by section 965. I would guess that the number of individual investors affected by that section was smaller than the number of multinationals, and that their total tax liability was a minute fraction of the $340 billion raised by the mandatory repatriation tax, which would have to be refunded if section 965 is held unconstitutional.

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October 10, 2023 in Tax, Tax Analysts, Tax Daily, Tax News, Tax Scholarship | Permalink

Wednesday, October 4, 2023

Tax Analysts Hosts A Virtual Panel Today On Debating The Global Minimum Tax

Debating-the-global-minimum-tax
Tax Analysts hosts a panel on Debating the Global Minimum Tax as part of the Taxing Issues series on tax policy today at 2:00 P.M. ET (registration): 

As a global minimum tax attracts growing support around the world, discussion about it continues to unfold in the United States. Our panel will thoroughly examine this multifaceted and controversial issue -- discussing the pros and cons of such a tax and encompassing the perspectives of both legislators and industry leaders. 

Tax Analysts is offering this episode of Taxing Issues as a free service to the public, and all attendees can receive CPE credit. To do so, you must register for the webcast before it starts and log in no later than the scheduled start time. You also must request CPE credits before each webcast, and you must answer the polling questions that will be asked throughout the event. 

Speakers: 

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October 4, 2023 in Scholarship, Tax, Tax Analysts, Tax Conferences, Tax Daily, Tax Scholarship | Permalink

Tuesday, October 3, 2023

Schwidetzky: Partnership Guaranteed Payments Should Be Repealed

Walter D. Schwidetzky (Baltimore), Partnership Guaranteed Payments: A Bad Idea That Should Be Repealed, 180 Tax Notes Fed. 1599 (Sept. 4, 2023): 

Tax Notes Federal (2022)Abstract
In this report, Schwidetzky explains why section 707(c), governing partnership guaranteed payments, was misguided from the outset and made even worse by the enactment of section 707(a)(2)(A).

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October 3, 2023 in Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Friday, September 29, 2023

2023 Tax Notes Student Writing Competition Winner: The Continuity of Business Enterprise Doctrine

Andres Berdugo (Chamberlain Hrdlicka, San Antonio, TX), Form Follows Function: The Continuity of Business Enterprise Doctrine, 180 Tax Notes 2333 (Sept. 25, 2023) (1st Place: Tax Notes Student Writing Competition):

Tax Analysts 2In this article, Berdugo analyzes the continuity of business enterprise doctrine and argues that ambiguity and other flaws in the implementing regulations prevent them from achieving the policy objectives of the doctrine.

Conclusion
Eliminating the COBE requirement does not appear to be an effective way to achieve the policy objectives of the reorganization provisions of the code. Treasury has emphasized the importance of COBE in ensuring that tax-free reorganizations simply adjust ongoing interests in property.

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September 29, 2023 in Legal Education, Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Wednesday, September 27, 2023

2003-2022 Tax Journal Rankings: Tax Law Review Is #1, Virginia Tax Review Is #2

Following up on yesterday's post, 2022 Tax Journal Rankings: Tax Law Review Is #1, Virginia Tax Review Is #2:  here are the Washington & Lee 2003-2022 tax law review combined rankings of eight major tax journals:

  • W&L-law-journal-rankingsColumbia Journal of Tax Law ("Columbia")
  • Florida Tax Review ("Florida")
  • Houston Business & Tax Review ("Houston")
  • Pittsburgh Tax Review ("Pittsburgh")
  • Tax Law Review ("NYU")
  • Tax Lawyer ("ABA")
  • Tax Notes Federal ("Tax Notes")
  • Virginia Tax Review ("Virginia")

The rankings are based on the annual combined rankings in 2003-2022 among these eight journals by:

Ave

Journal

22

21

20

19

18

17

16

15

14

13

12

11

10

09

08

07

06

05

04

03

1.6 1. NYU 1 1 3 2 3 3 2 2 2 2 2 1 1 1 1 1 1 1 1 1
2.5 2. Virginia 2 2 2 4 4 1 1 1 1 1 1 2 2 2 3 4 4 4 4 4
2.8 3. Florida 3 3 1 1 1 2 3 4 3 3 3 4 4 4 4 3 2 2 3 2
3.3 4. Tax Notes 4 5 4 3 2 4 4 3 4 4 4 3 3 3 2 2 3 3 2 3
5.4 5. ABA 6 6 NR 6 NR 5 5 5 5 5 6 5 6 6 6 6 5 5 5 5
7.9 6. Houston NR NR NR NR NR 10 9 7 6 6 7 7 7 8 8 9 8 8 9 9
7.9 7. Pittsburgh NR NR NR NR NR 8 8 8 7 8 5 6 5 5 5 22 NR NR NR NR
10.1 8. Columbia 5 4 5 5 NR 6 6 10 10 13 14 33 NR NR NR NR NR NR NR NR

As I have previously noted, Tax Notes fares poorly in the Impact Factor category (citations/number of articles published) because W&L apparently counts as "articles" all of the advance sheet material in Tax Notes Federal.

Tax Notes Federal is #1 by a wide margin in the number of citations in law reviews:

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September 27, 2023 in ABA Tax Section, Law Review Rankings, Legal Education, Scholarship, Tax, Tax Analysts, Tax Daily, Tax Rankings, Tax Scholarship, W&L Tax Journal Rankings | Permalink

Tuesday, September 26, 2023

2022 Tax Journal Rankings: Tax Law Review Is #1, Virginia Tax Review Is #2

Washington & Lee has just released the 2022 tax law review rankings of six major tax journals:

  • W&L Law Journal RankingsColumbia Journal of Tax Law ("Columbia")
  • Florida Tax Review ("Florida")
  • Tax Law Review ("NYU")
  • Tax Lawyer ("ABA")
  • Tax Notes Federal ("Tax Notes")
  • Virginia Tax Review ("Virginia")

The rankings are based on citations to articles published in 2018-2022 (methodology):

 

Combined

Impact

Journals

Cases

Currency

1. NYU 15.26 1.02 164 0 1.81
2. Virginia 12.12 0.8 137 1 1.52
3. Florida 7.69 0.44 115 2 0.80
4. Tax Notes 6.65 0.01 257 0 0.01
5. Columbia 5.88 0.41 57 0 0.73
6. ABA 4.49 0.22 82 2 0.38

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September 26, 2023 in ABA Tax Section, Law Review Rankings, Legal Education, Scholarship, Tax, Tax Analysts, Tax Daily, Tax Rankings, Tax Scholarship, W&L Tax Journal Rankings | Permalink

Monday, September 25, 2023

The American Law Institute Centennial And The Future Of Tax Projects

Monte A. Jackel (Jackel Tax Law, Silver Spring, MD), The ALI Centennial and the Future of Tax Projects, 180 Tax Notes Fed. 1483 (Aug. 28, 2023) (reviewing The American Law Institute: A Centennial History (Andrew S. Gold (Brooklyn) & Robert W. Gordon (Stanford) eds. 2023)):

ALIIn its centennial book of essays summarizing its 100 years of existence, the American Law Institute and the authors it selected to contribute to the book do a good job describing the various restatements, principles of law, and model codes that form a huge part of the ALI’s legacy. ... 

Not so well known is that the ALI has a long and rich history of engaging in projects involving federal tax. Unfortunately, the federal tax history of the ALI was not separately discussed in the centennial history. It should have been.

ALI Tax History
The ALI’s involvement in federal tax started in the early 1950s, when it engaged in a project relating to partner and partnership taxation as part of the prelude to the Internal Revenue Code of 1954. ... Several studies were published from the late 1950s through the 1970s on various federal income, estate, and gift tax subjects. Then, in or around 1984, there were several extensive studies done by the ALI, again led by the giants of the tax profession at that time, particularly experts in partnership and corporate tax. Those other federal tax studies were in the fields of corporate tax, international tax, estate and gift tax, and income taxation of trusts and estates. Finally, the ALI published a report on the taxation of private business enterprises in 1999. There has been no reported ALI activity on federal tax since 1999.

Discussion
It is my understanding that, after the 1999 project, the ALI leadership may have formed a view that tax legislation was too political and that the organization’s time and money were better spent elsewhere.

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September 25, 2023 in Legal Education, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Wednesday, September 20, 2023

Hemel: The Low And High Stakes Of Moore v. United States

Daniel J. Hemel (NYU; Google Scholar), The Low and High Stakes of Moore v. United States, 180 Tax Notes Fed. 563 (July 24, 2023):

Tax-notes-federalMoore v. United States, the challenge to the constitutionality of the mandatory repatriation tax slated for argument at the Supreme Court in the October 2023 Term, looks at first glance like a battle between two different definitions of income. On one side, petitioners Charles and Kathleen Moore — cheered on by the Chamber of Commerce and the Wall Street Journal editorial board — argue that, for 16th Amendment purposes, “income” requires a realization event such as the receipt of money or an exchange of property. That theory, if it prevails, would cast doubt on numerous code provisions ranging from the original issue discount rules to the mark-to-market regime for regulated futures contracts.

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September 20, 2023 in Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Thursday, September 7, 2023

Blue J: Implications Of The Legal Singularity For Tax Professionals

Benjamin Alarie (Osler Chair in Business Law, University of Toronto; CEO, Blue J Legal), et al., The Path of Tax Law: Toward Legal Singularity, 180 Tax Notes Fed. 1455 (Aug. 28, 2023):

Legal Singularity (Wide)Artificial intelligence is advancing rapidly. It is already changing many areas of our lives, including our work as tax professionals. This change is especially noticeable in the legal world, which is trying to understand and adapt to AI. A Tucciarone I. Introduction Artificial intelligence is advancing rapidly. It is already changing many areas of our lives, including our work as tax professionals. This change is especially noticeable in the legal world, which is trying to understand and adapt to AI. A new book, The Legal Singularity: How Artificial Intelligence Can Make Law Radically Better, explores how society can harness AI to radically improve the law. The volume advances a vision of future law, including future tax law, as comprehensive, complete, and predictable. It carefully develops and examines the concept of the legal singularity, exploring its key foundations, potential ramifications, and pathways for responsible technological progress. AI safety is a key focus.

In this installment of Blue J Predicts, we consider the implications of the legal singularity for tax professionals, drawing on insights from this recently published book. ...

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September 7, 2023 in Scholarship, Tax, Tax Analysts, Tax Scholarship | Permalink

Wednesday, August 23, 2023

Can ChatGPT-4 Really Do Tax?

Andrew Blair-Stanek (Maryland; Google Scholar), Nils Holzenberger (Institut Polytechnique de Paris) & Benjamin Van Durme (Johns Hopkins; Google Scholar), OpenAI Cribbed Our Tax Example, But Can GPT-4 Really Do Tax?, 180 Tax Notes Fed. 1101 (Aug. 14, 2023):

Tax Notes Federal (2022)In the livestream introducing GPT-4, OpenAI used one of our SARA [acronym for StAtutory Reasoning Assessment] tax cases verbatim, describing it as a real tax example, even though SARA is a simplified academic data set. In the demo, OpenAI also used our heavily edited SARA version of the IRC. OpenAI incorrectly thought GPT-4 had correctly calculated the tax liability because its answer matched the SARA answer, although our IRC edits change the result from the actual IRC. We tested GPT-4 on the entire SARA data set. It gets tax liabilities exactly right around one-third of the time and miscalculates tax liabilities by over 10 percent nearly a quarter of the time. GPT-4 often misreads even our simplified version of the IRC. In the livestream, the presenter warned, “You should always check with your tax adviser.” Wise advice. ...

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August 23, 2023 in Legal Ed Tech, Legal Education, Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Wednesday, August 9, 2023

Blue J: The Ethics Of Generative AI In Tax Practice

Benjamin Alarie (Osler Chair in Business Law, University of Toronto; CEO, Blue J Legal) & Rory McCreight (Lead Analyst, Blue J Legal, The Ethics of Generative AI in Tax Practice, 180 Tax Notes Fed. 785 (July 31, 2023):

Tax Notes Federal (2022)The integration of generative artificial intelligence is beginning to have a profound effect on various industries, including knowledge industries such as law and accounting. Professional services firms are capitalizing on AI technologies for a host of applications, such as tax research, memo drafting, contract analysis, due diligence, document review, predictive analytics, and the list goes on. Recently, AI’s sharply increasing competence, most evident with OpenAI’s GPT-4, has made it a valuable tool for firms looking to improve their operations and deliver more effective and efficient tax planning and advisory services. In-house tax departments are starting to explore using generative AI to assist them in their work as well.

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August 9, 2023 in Legal Education, Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Saturday, August 5, 2023

Tax Lawyers vs. CPAs

Philip Wolf (Scale, San Francisco), Tax Lawyers vs. CPAs: Interview With James Creech, 180 Tax Notes Fed. 577 (July 24, 2023):

Tax Notes Federal (2022)What is the difference between a tax attorney and a tax accountant? The boundary between these two professions can be blurry because proficient tax attorneys must be comfortable with accounting functions, and proficient accountants must be familiar with many tax laws and regulations. Indeed, a substantial number of individuals are both licensed attorneys and CPAs.

Large accounting firms often hire tax lawyers (as well as economists, MBAs, and other professionals) because they bring breadth and perspective to transactional accounting functions. ...

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August 5, 2023 in Tax, Tax Analysts, Tax Daily, Tax News | Permalink

Thursday, August 3, 2023

Hemel: The Low And High Stakes Of Moore

Daniel J. Hemel (NYU: Google Scholar), The Low and High Stakes of Moore, 180 Tax Notes Fed. 563 (July 24, 2023):

Tax Notes Federal (2022)Moore, the challenge to the constitutionality of the mandatory repatriation tax slated for argument at the Supreme Court next term, looks at first glance like a battle between two different definitions of income.

On one side, petitioners Charles and Kathleen Moore — cheered on by the Chamber of Commerce and the Wall Street Journal editorial board — argue that, for 16th Amendment purposes, “income” requires a realization event such as the receipt of money or an exchange of property. That theory, if it prevails, would cast doubt on numerous code provisions ranging from the original issue discount rules to the mark-to-market regime for regulated futures contracts.

On the other side, the solicitor general argues that the 16th Amendment allows Congress to tax income on a realization basis and an accrual basis, with both types of taxes passing constitutional muster. That view has represented the conventional wisdom among tax scholars for decades, though the Supreme Court has never endorsed it in as many words.

But there is more to Moore than meets the eye.

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August 3, 2023 in Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Wednesday, August 2, 2023

Clausing: The Revenue Consequences Of Pillar 2

Kimberly A. Clausing (UCLA; Google Scholar), The Revenue Consequences of Pillar 2: Five Key Considerations, 180 Tax Notes Fed. 555 (July 24, 2023):

Tax Notes Federal (2022)In this article, Clausing discusses a recent analysis by the Joint Committee on Taxation [Possible Effects of Adopting the Components of the OECD’s Pillar Two, Both Worldwide and in the United States] concerning the revenue consequences of the United States adopting pillar 2 conforming tax reforms.

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August 2, 2023 in Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Tuesday, August 1, 2023

Faber: A Retired Tax Lawyer’s Guide To Nonprofit Board Service

Peter L. Faber (McDermott Will & Emery, New York),  A Retired Tax Lawyer’s Guide to Nonprofit Board Service, 180 Tax Notes Fed. 113 (July 3, 2023):

Tax Notes Federal (2022)I retired five years ago after practicing tax law for 55 years. A question that typically occurs to a lawyer approaching retirement is: What will I do with my time? I had those concerns, but they proved to be unfounded. I am still trying to find all that free time that people assured me I would have.

I and many others have found that service on boards of nonprofit organizations can be satisfying and can be a way of giving back to our communities. One must be careful, and in the remainder of this letter I shall discuss some of the pitfalls that one must avoid.

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August 1, 2023 in Tax, Tax Analysts, Tax Daily, Tax News | Permalink

Monday, July 31, 2023

Lazerow: Settling Holocaust Art Cases With Tax Help

Herbert I. Lazerow (San Diego), Settling Holocaust Art Cases With Tax Help, 180 Tax Notes Fed. 73 (July 3, 2023):

Tax Notes Federal (2022)In this article, Lazerow argues that tax incentives such as a charitable deduction and special Holocaust recovery legislation would be useful avenues to help settle disputes arising from art that was separated from owners during the Holocaust and would make negotiated settlements between claimants and museums more likely and efficient than litigation.

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July 31, 2023 in Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Wednesday, July 12, 2023

Blue J Predicts: Conflicting Duties And The Trust Fund Recovery Penalty In Cashaw

Benjamin Alarie (Osler Chair in Business Law, University of Toronto; CEO, Blue J Legal) & Christopher Yan (Senior Legal Research Associate, Blue J Legal), A Reexamination of Cashaw, 179 Tax Notes Fed. 2197 (June 26, 2023):

Tax Notes Federal (2022)[W]e revisit the intriguing case of Cashaw [v. Commissioner, T.C. Memo. 2021-123 (Oct. 27, 2021)]. This case focused on Pamela Cashaw, an administrator for a financially distressed hospital, who the Tax Court determined was personally liable for a $173,000 trust fund recovery penalty (TFRP) under section 6672. The fundamental issue was whether Cashaw was a responsible person who had willfully failed to fulfill her legal obligation to remit employee payroll tax withholdings, also known as trust fund taxes, thereby warranting the imposition of a TFRP.

In our November article we used Blue J’s TFRP prediction algorithm to assess the likely outcome of an appeal [Cashaw: Conflicting Duties And The Trust Fund Recovery Penalty, 177 Tax Notes Fed. 1257 (Nov. 28, 2022)]. Blue J predicted with 86 percent confidence that the Fifth Circuit would affirm the Tax Court’s decision if it endorsed the Tax Court’s findings of fact. Our analysis also considered alternate scenarios and examined the circumstances under which the Tax Court’s decision might be reversed. That exercise highlighted the importance of scrutinizing various factors in the case.

Now fast-forward to May 31. The Fifth Circuit affirmed the Tax Court’s decision, reiterating Cashaw’s liability for the trust fund recovery penalties. That validated Blue J’s prediction that Cashaw was a responsible person who had willfully neglected to pay. The result from Blue J’s TFRP predictive model, trained on the facts of more than 375 court opinions from 1956 to 2022 (trained up to the date of the prediction), underscores the transformative power of machine learning in conducting nuanced legal analyses.

As we reexamine Cashaw, we not only delve into the context of TFRP and the factors in the appeal but also reflect on the role our machine-learning-based prediction played in the analysis of this case. The alignment of machine-identified factors with those factors that have been decisive on appeal generates support for broader discussions on the future of artificial intelligence in legal decision-making.

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July 12, 2023 in New Cases, Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink

Tuesday, July 11, 2023

Blue J: The Rise Of Generative AI For Tax Research

Benjamin Alarie (Osler Chair in Business Law, University of Toronto; CEO, Blue J Legal) et al., The Rise of Generative AI for Tax Research, 179 Tax Notes 1609 (May 29, 2023):

Tax Notes Federal (2022)ChatGPT has exploded into the popular consciousness. Generative artificial intelligence, in the form of natural language chatbots, is newly poised to significantly shift how tax professionals conduct research. These emerging advanced AI systems can analyze vast amounts of text and generate coherent, contextually relevant responses.

As various industries continue to adopt AI-powered tools, lawyers need to understand and adapt to these new technologies. As Jason Chen has written in Tax Notes, “It is only by incorporating these types of technological advances into daily business practices that modern tax professionals can gain valuable advantages over others in the increasingly competitive world of taxation.”

In this article, we will consider the benefits of using generative AI, examine the concerns, and discuss ways that it can be improved.

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July 11, 2023 in Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship | Permalink