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Articles 1 - 2 of 2
Full-Text Articles in Business
The Ubit: Leveling An Uneven Playing Field Or Tilting A Level One?, Michael S. Knoll
The Ubit: Leveling An Uneven Playing Field Or Tilting A Level One?, Michael S. Knoll
All Faculty Scholarship
After grateful alumni acquired the Mueller Spaghetti Company on behalf of New York University, and the courts held that the university did not have to pay tax on the pasta maker’s income, Mueller’s competitors cried foul. Congress responded to their pleas and enacted the unrelated business income tax (UBIT). The UBIT subjects an otherwise tax-exempt entity, such as a charitable institution or a religious organization, to tax on its income from a trade or business that is not substantially related to the organization’s tax-exempt purpose. The UBIT is widely viewed as leveling the playing field between taxable for-profit businesses and …
Compaq Redux: Implicit Taxes And The Question Of Pre-Tax Profit, Michael S. Knoll
Compaq Redux: Implicit Taxes And The Question Of Pre-Tax Profit, Michael S. Knoll
All Faculty Scholarship
This paper takes a new look at the cross-border dividend-stripping transactions that gave rise to the Fifth Circuit’s opinion in Compaq v. Commissioner and the Eighth Circuit’s opinion in IES Industries v. Commissioner. In both cases, the circuit courts held for the taxpayers and rejected the Commissioner’s claim that the transactions lacked economic substance because the taxpayers were sure to lose money on the transactions before taxes. These cases generated extensive commentary that was split into two diametrically opposed camps. One group argued that the decisions were correct because the transactions were economically profitable business transactions. The other group argued …