Law Commons^™

Tit For Tat: How Will Other Countries React To The Tax Cuts And Jobs Act?, Reuven S. Avi-Yonah, Gianluca Mazzoni

Law & Economics Working Papers

The Tax Cuts and Jobs Act of 2017 (TRA17) represents the most comprehensive reform of US international tax rules since 1962. An important question in evaluating TRA17 is how US trading partners will respond to its provisions. In general, US trading partners may take steps to negate the competitive advantage gained by the US from the lower rate of corporate tax, expensing and the “patent box”. They may also take advantage of the participation exemption and the cross-crediting feature of GILTI to increase taxes on US multinationals. Finally, they are likely to copy the BEAT and apply it to US …

Uk Governance: From Overloading To Freeloading, Richard Woodward

Articles

The UK's ongoing political turbulence has prompted a reprise of debates from the 1970s when many concluded the country was ungovernable. Then, the most influential diagnosis conceptualised the UK's governance problem as one of ‘overloading’ caused by the electorate's excessive expectations. This article argues that these accounts overlooked another phenomenon besieging UK governance during this period. This phenomenon was freeloading: the withering of government capacity deriving from the ability of actors to enjoy the benefits of citizenship without altogether contributing to the cost. In the interim, these problems have become endemic, not least because of the unspoken but discernible policy …

Something's Gotta Give: Origin-Based E-Commerce Sales Tax, Juliana Frenkel

Brooklyn Journal of Corporate, Financial & Commercial Law

How to tax interstate online purchases is a frequently debated and contentious topic in the business and tax arena. There are numerous parties affected when a transaction occurs and each affected party would like a taxation policy that benefits its own economic interests, without regard for others. Neither the legislative nor the judicial branch has successfully resolved this e-commerce taxation issue. With the growing need for tax revenue, it is prudent for Congress to finally resolve this circuit split and agree on a unifying Online Sales Tax Law. As opposed to the vast majority of proposals pending in Congress, this …

Income Tax Concerns With Purpose Trusts, Thomas E. Simmons

Thomas E. Simmons

No abstract provided.

Protective Claims For Refund: Protecting The Interests Of Taxpayers And The Irs, Kristy M. Bowden

Maine Law Review

The Internal Revenue Code provides taxpayers wishing to claim a refund of an overpayment of taxes with a simple, straightforward provision setting forth a taxpayer's right to make such a claim. Additionally, regulations exist that provide for the procedure to be followed in order to claim a refund, further clarifying what is expected of the taxpayer. Unfortunately, not all situations that give rise to the right to claim a refund are so straightforward and simple. Taxpayers may find themselves in a situation that seems to have very little direct connection with tax, but may nonetheless result in significant tax consequences. …

The Triumph Of Beps: Us Tax Reform And The Single Tax Principle, Reuven S. Avi-Yonah

Law & Economics Working Papers

The Tax Cut and Jobs Act (TRA17) as passed by the House on November 16 and by the Senate on December 2, 2017, contains multiple provisions that incorporate the principles of the OECD/G20 Base Erosion and Profit Shifting (BEPS) into domestic US tax law. Together with the changes in the 2016 model US tax treaty, these provisions mean that the US is following the EU and China in implementing BEPS and in particular its underlying principle, the single tax principle (i.e., all income should be subject to tax once: passive income at the residence state rate and active income at …

26 Usc Section 280e: Will The Dragon Now Be Slayed?, Bill Greenberg, Rebecca Greenberg

Journal of Law and Policy

26 USC § 280E of the Internal Revenue Code (“§ 280E”) prohibits the deduction of ordinary business expenses for businesses deemed by the federal government to be drug traffickers as defined by the Controlled Substances Act (“CSA”). The tax enactment is specifically designed to serve as a disincentive to socalled drug traffickers who might otherwise deduct “ordinary and necessary business expenses” from their taxes. However, this harms legitimate cannabis businesses by promoting unintended consequences, such as under-reported income. For three decades, there has been a patent incongruity between § 280E’s congressional purpose and the expansion of state-legalized cannabis businesses in …

Democracy And Trusts, Carla Spivack

ACTEC Law Journal

Spendthrift trusts which shield assets from creditors have been an ongoing problem for the law since their advent in the nineteenth century. Other, very recent, forms of trust are an even bigger problem: they take the notion of asset protection much farther, allowing settlors to protect not only the beneficiary’s assets, but their own, from creditors; these are called “self-settled asset protection trusts". Moreover, more and more states allow so-called “dynasty trusts” which allow settlors and beneficiaries to maintain assets in trust tax free for generations, overturning long-settled principles of the common law such as the Rule Against Perpetuities. All …

Macroeconomic Modeling Of Tax Policy: A Comparison Of Current Methodologies, Itai Grinberg, Alan J. Auerbach, Thomas A. Barthold, Nicholas Bull, W. Gavin Elkins, Pamela J. Moomau, Rachel Moore, Benjamin Page, Brandon Pecoraro, Kyle Pomerleau

Georgetown Law Faculty Publications and Other Works

The macroeconomic effects of tax reform are a subject of significant discussion and controversy. In 2015, the House of Representatives adopted a new “dynamic scoring” rule requiring a point estimate within the budget window of the deficit effect due to the macroeconomic response to certain proposed tax legislation. The revenue estimates provided by the staff of the Joint Committee on Taxation (JCT) for major tax bills often play a critical role in Congressional deliberations and public discussion of those bills. The JCT has long had macroeconomic analytic capability, and in recent years, responding to Congress’ interest in macrodynamic estimates for …

A Destination-Based Cash Flow Tax Can Be Structured To Comply With World Trade Organization Rules, Itai Grinberg

Georgetown Law Faculty Publications and Other Works

This paper briefly outlines alternative approaches to enacting a destination-based cash flow tax that are more clearly compatible with the World Trade Organization rules than the approach that has previously been described in the literature. The first structural alternative involves expanding the universe of businesses subject to the tax by clearly defining both the base of the new U.S. business tax and its tax nexus requirement as domestic consumption, and thereafter treating foreign importers and other sellers equivalently, rather than imposing a deduction disallowance or an import tax. The second alternative involves adopting a business activities tax, and then enacting …

Securing Charitable Contribution Deductions, Paul G. Schloemer

Business Administration Faculty Publications

Issues regarding charitable contributions have been a frequent source of contention between the IRS and taxpayers - the charitable contribution deduction was identified as one of the most litigated issues in the National Taxpayer Advocate’s latest report to Congress.1 Thus, a review of the key issues taxpayers encounter in claiming this deduction is warranted.

Family Limited Partnerships And Section 2036: Not Such A Good Fit, Mitchell M. Gans, Jonathan G. Blattmachr

ACTEC Law Journal

The IRS has struggled to close down abusive family limited partnerships. At first unreceptive to IRS arguments, the courts eventually embraced section 2036 as an estate-tax tool for attacking such partnerships. Because the section was not designed to apply to partnerships, difficulties have arisen as the courts have struggled with the fit. In its most recent encounter, the Tax Court in Powell grappled with a fit-related issue that implicates the Supreme Court’s landmark decision in Byrum. The Powell court, it will be argued, misread Byrum, conflating the majority opinion with the dissent – and converting the rule-based approach …

Honoring Probable Intent In Intestacy: An Empirical Assessment Of The Default Rules And The Modern Family, Danaya C. Wright, Beth Sterner

ACTEC Law Journal

This article provides preliminary analysis of an empirical study of nearly 500 wills probated in Alachua and Escambia Counties in the State of Florida in 2013. The particular focus of the study is to determine if there are noticeable patterns of property distribution preferences among decedents based on their diverse family relationships. Earlier empirical studies of distribution preferences indicated that a majority of married decedents wanted to give all or most of their estates to their surviving spouses. As a result of these studies, most states amended their probate codes to give surviving spouses a sizable percentage of a decedent …

A Consumer Protection Rationale For Regulation Of Tax Return Preparers, Pippa Browde

Marquette Law Review

Of the 150 million tax returns filed each year, approximately fifty-six percent are prepared with the help of a paid preparer. Although state-licensed lawyers and certified public accountants may prepare tax returns for clients, the vast majority of paid tax return preparers are completely unregulated. For low-income taxpayers who are eligible for refundable tax credits, these unregulated tax return preparers do more than just fill out tax returns. Return preparers who serve low-income taxpayers often also market consumer credit products, such as refund anticipation loans or checks.

Government agencies and consumer advocates have documented widespread problems with the tax return …

Front Matter

ACTEC Law Journal

No abstract provided.

Social Control Of Wealth In Antebellum New York, William P. Lapiana

ACTEC Law Journal

No abstract provided.

Partnerships, Vincent Ooi

Research Collection Yong Pung How School Of Law

Partnerships and tax—overview: The statutory definition of a partnership is the “relation which subsists between persons carrying on a business in common with a view of profit”. Those persons could be natural persons, or other legal entities such as companies or trustees. However, a registered company under the Companies Act (Cap. 50) (2006 Rev. Ed.) is not a partnership.

A Vatcoin Proposal Following On The 2017 Eu Vat Proposals - Mtic, Vatcoin, And Blockchain, Richard Thompson Ainsworth, Musaad Alwohaibi, Michael Cheetham, Camille Tirand

Faculty Scholarship

The following proposal for an EU VATCoin was presented at the Digital Tax Transformations Conference, December 18 & 19, 2017 in Vienna, Austria at WU Global Tax Policy Center (WU GTPC) at the Institute for Austrian and International Tax Law of Vienna University of Business and Economics.

The EU Commission has proposed “far-reaching reforms” to solve some of the fraud in the EU VAT. It hopes to capture €50 billion lost annually to MTIC fraud in goods. It hopes to do this without addressing tradable services, a MTIC mutation which by all accounts is running strong.

Fortunately, the Commission is …

The Unreasonable Case For A Reasonable Compensation Standard In The Public Company Context: Why It Is Unreasonable To Insist On Reasonableness, Stuart G. Lazar

Stuart Lazar

There is no question that corporate executives are well paid. But does high executive compensation mean excessive or unreasonable compensation? And if so, what is the solution to curbing the problem of excessive executive pay? More specifically, should the Internal Revenue Code be used as a means for regulating the actions of public companies?

This Article briefly explores these issues. In Part I, this Article provides a narrative of the excessive compensation debate. Without drawing a conclusion as to whether executive compensation is reasonably set or excessive in nature, Part I summarizes the history of public outrage surrounding executive pay. …

Irs Overhauls Spin-Off Ruling Guidelines, Stuart M. Finkelstein, Stuart G. Lazar

Stuart Lazar

No abstract provided.

Schooling Congress: The Current Landscape Of The Tax Treatment Of Higher Education Expenses And A Framework For Reform, Stuart G. Lazar

Stuart Lazar

Education may be a cornerstone of our society, but the tax treatment of higher education expenses does not appear to have resulted from an intellectual exercise that would make our nation’s educators’ proud. The Internal Revenue Code provides two separate, but equally unsatisfying, routes that allow taxpayers to offset their income with the costs of higher education. Where an individual can reduce her tax liability while receiving an education, the effect is to reduce significantly the cost of that education. First, where amounts spent on education qualify as an “ordinary and necessary business expense,” a taxpayer will be entitled to …

Business Lobbying As An Informational Public Good: Can Tax Deductions For Lobbying Expenses Promote Transparency?, Michael Halberstam, Stuart G. Lazar

Stuart Lazar

The view that “lobbying is essentially an informational activity” has persistently served the suggestion that lobbying provides a public good by educating legislators about policy and the consequences of legislation. In this article, we link a proposed tax reform with a substantive disclosure requirement to promote the kind of “information subsidy” that serves the public interest, while mitigating – at least to some extent – the distortion that may result from the imbalance of financial resources on the business side and other institutional contraints identified in the literature. We argue that corporate lobbying should be encouraged – by allowing business …

Once More, With Feeling: The 'Tax Cuts And Jobs' Act And The Original Intent Of Subpart F, Reuven S. Avi-Yonah, Nir Fishbien

Law & Economics Working Papers

For the first time since 1913, Congress is considering abandoning the principle that US residents should be subject to tax on all income “from whatever source derived.” Specifically, the House proposed tax reform legislation, the so-called “Tax Cuts and Jobs Act”, would completely exempt from US taxation dividends from “Controlled Foreign Corporations”. This is therefore a good occasion for considering the reasons we tax such dividends in the first place.

In the course of investigating the Stanley Surrey papers at the Harvard Law School Library, we discovered a remarkable report that support the view that the main impetus behind Subpart …

What A Difference Thirty Years Make: A Comparison Of The Tax Reforms Of 1986, 2014 And 2017, Reuven S. Avi-Yonah

Law & Economics Working Papers

This paper compares the Tax Cuts and Jobs Act of 2017, as passed by the House (TRA17H) and under consideration by the Senate (TRA17S) with two major previous efforts at comprehensive tax reform: The Tax Reform Act of 1986 (TRA86) and the draft tax reform proposed by former Ways and Means Chair David Camp (R-MI) (TRA14). It shows that TRA14 was quite similar to TRA86, but that TRA17 is very different than both. Congress should abandon TRA17 and go back to considering TRA14 on a bipartisan basis.

Collection Of Cryptocurrency Customer-Information: Tax Enforcement Mechanism Or Invasion Of Privacy?, Austin Elliott

Duke Law & Technology Review

After granting permission to the Internal Revenue Service to serve a digital exchange company a summons for user information, the Federal District Court for the Northern District of California created some uncertainty regarding the privacy of cryptocurrencies. The IRS views this information gathering as necessary for monitoring compliance with Notice 2014-21, which classifies cryptocurrencies as property for tax purposes. Cryptocurrency users, however, view the attempt for information as an infringement on their privacy rights and are seeking legal protection. This Issue Brief investigates the future tax implications of Notice 2014-21 and considers possible routes the cryptocurrency market can take to …

Reaping Where They Have Not Sowed: Have American Churches Failed To Satisfy The Requirements For The Religious Tax Exemption?, Vaughn E. James

The Catholic Lawyer

No abstract provided.

Can Taxes Mitigate Corporate Governance Inefficiencies?, Noam Noked

William & Mary Business Law Review

Policymakers have long viewed tax policy as an instrument to influence and change corporate governance practices. Certain tax rules were enacted to discourage pyramidal business structures and large golden parachutes, and to encourage performance-based compensation. Other proposals, such as imposing higher taxes on excessive executive compensation, have also attracted increasing attention.

Contrary to this view, this Article contends that the ability to effectively mitigate corporate governance inefficiencies through the use of corrective taxes is very limited, and that these taxes may cause more harm than benefit. There are a few reasons for the limited effectiveness of corrective taxes. Importantly, the …

The Inappropriateness Of The Bad Checks Penalty, Jeffrey H. Kahn, Douglas A. Kahn

Scholarly Publications

In this article, the authors argue that the penalty for sending a bad check to the IRS is excessive and that the reasonable cause exception should apply to any honest factual error.

Taxing Systemic Risk, Eric D. Chason

The University of New Hampshire Law Review

A tax on the harmful elements of finance—a tax on systemic risk—would raise revenue and also lower the likelihood of future crisis. Financial institutions, which pay the tax, would try to minimize its cost by lowering their systemic risk. In theory, a tax on systemic risk is perfect policy. In practice, however, this perfect policy is unattainable. Tax laws need clear definitions to be administrable. Our current understanding of systemic risk is too abstract and too metaphorical to serve as a target for taxation.

Despite the absence of a clear definition of systemic risk, academics and policy makers continue to …

Brief Of Amici Curiae Tax Law Professors And Economists In Support Of Petitioner In South Dakota V. Wayfair, Richard Pomp, Daniel Jacob Hemel, Reuven S. Avi-Yonah, Joseph Bankman, Jordan Barry, Lily L. Batchelder, John R. Brooks, Samuel D. Brunson, J. Clifton Fleming Jr, David Gamage, Ari Glogower, Jacob Goldin, Andrew J. Haile, David J. Herzig, Hayes R. Holderness, Calvin H. Johnson, Richard L. Kaplan, Michael S. Knoll, Zachary Liscow, Yair Listokin, Ruth Mason, Goldburn Maynard, Orly Mazur, Susan C. Morse, James R. Repetti, Julie A. Roin, Daniel Schaffa, Erin Adele Scharff, Daniel N. Shaviro, Jay A. Soled, Sloan Speck, Kirk J. Stark, John A. Swain, Adam Thimmesch, Manoj Viswanathan, Edward A. Zelinsky, Eric M. Zolt

J. Clifton Fleming, Jr.