Law Commons^™

Standing On The Shoulders Of Llcs: The Tax Entity Status And Decentralized Autonomous Organizations, Samuel D. Brunson

Faculty Publications & Other Works

Since the formation of the first decentralized autonomous organization (DAO) in 2016, their use has exploded. Thousands of DAOs now try to take advantage of smart contracts to solve a problem that plagues business entities: the gulf between ownership and management. Armed with smart contracts and requiring token-holders to vote on any change in strategy, DAOs dispense with the management layer so necessary in traditional business entities. DAOs owe their existence to technology. Without blockchain, without cryptocurrency, and without smart contracts, there would be no DAOs. But they owe their explosiveness to something much more unexpected: Treasury regulations. In the …

A Critical Evaluation Of The Qualified Small Business Stock Exclusion, Gregg Polsky, Ethan Yale

Scholarly Works

Section 1202 of the Internal Revenue Code grants a gain exclusion to certain shareholders who own "qualified small business stock." We describe the tortured history of this rule, explain how it works (and fails to work), and critically evaluate whether the rule serves any coherent policy objective. If Congress keeps the rule in place, significant revisions are necessary to align the rule with sound policy and tamp out the abusive manipulations arguably permitted by the law in its present form. We propose several improvements along these lines. We also make the case for eliminating the exclusion in its entirety.

The Impact Of The 2017 Tax Act On Certain Personal Injury Plaintiffs, Gregg Polsky

Scholarly Works

The 2017 Tax Act was the most sweeping federal tax legislation in over a generation. While many of its reforms, from dramatically lowering the corporate tax rate to altering the international tax rules, have already received significant attention, little attention has been paid to the 2017 Tax Act’s effects on personal injury plaintiffs. This Article explores these impacts.

The 2017 Tax Act added a new provision that indirectly affects plaintiffs who allege sexual harassment or abuse. The new provision disallows the defendants’ deductions in these cases if the parties enter into a nondisclosure agreement. While targeted at defendants, the provision …

Let Prophets Be (Non) Profits, Samuel D. Brunson, David Herzig

Faculty Publications & Other Works

No abstract provided.

In Search Of Smarter Homeowner Subsidies, Matthew Rossman

Faculty Publications

Critics have long assailed the federal tax code’s principal homeowner subsidies as lucrative tax breaks for upper income households that are essentially worthless to those financially constrained from purchasing a home. This article examines the subsidies through a different lens and reveals another serious flaw. It demonstrates how the homeowner subsidies, which represent a massive federal investment in homeownership, do very little to contain and instead probably increase costs on others that result from certain types of housing choices and that other federal policies seek to remedy. These negative housing externalities include: (i) blight, deterioration, and public health risks in …

Dear I.R.S., It Is Time To Enforce The Campaigning Prohibition. Even Against Churches, Samuel Brunson

Faculty Publications & Other Works

In 1954, Congress prohibited tax-exempt public charities, including churches, from endorsing or opposing candidates for office. To the extent a tax-exempt public charity violated this prohibition, it would no longer qualify as tax-exempt, and the IRS was to revoke its exemption.

While simple in theory, in practice, the IRS rarely penalizes churches that violate the campaigning prohibition and virtually never revokes a church's tax exemption. And, because no taxpayer has standing to challenge the IRS's inaction, the IRS has no external imperative to revoke the exemptions of churches that do campaign on behalf of or against candidates for office.

This …

Of More Than Usual Interest: The Taxing Problem Of Debt Principal, Charlene Luke

UF Law Faculty Publications

Leverage is an essential but often troubling component of the U.S. market. The financial crisis highlighted the risks and complexity of a leverage web that includes flesh-and-blood people from all walks of life and paper people from all corners of the business and investment world. In the tax area, the potentially problematic incentive effects of interest deductibility have long engaged a wide array of tax commentators and policymakers. While interest deductibility rightly receives widespread scrutiny, a more comprehensive approach to leverage is needed. This Article focuses on the surprisingly complicated tax treatment of cash (and cash equivalent) borrowings. This Article …

Taxing The Unheavenly Chorus: Why Section 501(C)(6) Trade Associations Are Undeserving Of Tax Exemption, Philip Hackney

Articles

Our federal, state, and local governments provide a subsidy that enhances the political voice of business interests. This article discusses the federal subsidy for business interests provided through the Internal Revenue Code (“Code”) and argues why we should end that subsidy. Under the same section that provides exemption from income tax for charitable organizations, the Code also exempts nonprofit organizations classified as “business leagues, chambers of commerce, real-estate boards, boards of trade, or professional football leagues.” Theory supporting tax exemption states that we should subsidize nonprofit organizations that provide goods or services that are undersupplied by the market. A charitable …

Recent Developments In Federal Income Taxation: The Year 2012, Martin J. Mcmahon Jr., Ira B. Shepard, Daniel L. Simmons

UF Law Faculty Publications

This recent developments outline discusses, and provides context to understand the significance of, the most important judicial decisions and administrative rulings and regulations promulgated by the Internal Revenue Service and Treasury Department during the most recent twelve months - and sometimes a little farther back in time if we find the item particularly humorous or outrageous. Most Treasury Regulations, however, are so complex that they cannot be discussed in detail and, anyway, only a devout masochist would read them all the way through; just the basic topic and fundamental principles are highlighted - unless one of us decides to go …

The New York Marriage Equality Act And The Income Tax, Patricia A. Cain

Faculty Publications

No abstract provided.

Recent Developments In Federal Income Taxation: The Year 2011, Martin J. Mcmahon Jr., Ira B. Shepard, Daniel L. Simmons

UF Law Faculty Publications

This recent developments outline discusses, and provides context to understand the significance of, the most important judicial decisions and administrative rulings and regulations promulgated by the Internal Revenue Service and Treasury Department during the most recent twelve months - and sometimes a little farther back in time if we find the item particularly humorous or outrageous. Most Treasury Regulations, however, are so complex that they cannot be discussed in detail and, anyway, only a devout masochist would read them all the way through; just the basic topic and fundamental principles are highlighted - unless one of us decides to go …

A Tisket, A Tasket: Basketing And Corporate Tax Shelters, Leandra Lederman

Articles by Maurer Faculty

In an income tax system that comported with the economic, or Haig-Simons, definition of income, deductible expenses would not face source-based limitations. A true Haig-Simons income tax system therefore would not take the schedular approach of sorting different types of expenses and losses into distinct conceptual “baskets” containing corresponding types of income. Practical realities often require departing from the Haig-Simons norm, however. The U.S. federal income tax system does require individuals to basket a number of types of expenses and losses. For example, individuals’ passive activity losses can only be deducted from passive income gains. By contrast, most corporations taxed …

Recent Developments In Federal Income Taxation: The Year 2010, Martin J. Mcmahon Jr., Ira B. Shepard, Daniel L. Simmons

UF Law Faculty Publications

This recent developments outline discusses, and provides context to understand the significance of, the most important judicial decisions and administrative rulings and regulations promulgated by the Internal Revenue Service and Treasury Department during the year 2010--and sometimes a little farther back in time if we find the item particularly humorous or outrageous. Most Treasury Regulations, however, are so complex that they cannot be discussed in detail and, anyway, only a devout masochist would read them all the way through; just the basic topic and fundamental principles are highlighted--unless one of us decides to go nuts and spend several pages writing …

A Diversity Theory Of Charitable Tax Exemption—Beyond Efficiency, Through Critical Race Theory, Toward Diversity, David A. Brennen

Law Faculty Scholarly Articles

What is the normative rationale for the federal income tax exemption for nonprofit charitable corporations? Even though the exemption dates back to 1894, Congress has failed to fully rationalize it. Though scholars and courts have attempted over the years to come up with a coherent rationale for the charitable tax exemption, their attempts are focused almost exclusively on economic efficiency. Thus, the charitable tax exemption is typically framed by noted tax scholars like Boris Bittker, Henry Hansmann, and others as an economically efficient means of providing certain goods and services to the public. Rationalizing the charitable tax exemption in economic …

Anatomy Of A Disaster Under The Internal Revenue Code, Francine J. Lipman

Scholarly Works

No abstract provided.

Employment Discrimination Remedies And Tax Gross Ups, Gregg D. Polsky, Stephen F. Befort

Scholarly Works

This article considers whether a successful employment discrimination plaintiff may be entitled, under current law, to receive an augmented award (a gross up) to neutralize certain adverse federal income tax consequences. The question of whether such a gross up is allowed, the resolution of which can have drastic effects on litigants, has received almost no attention from practitioners, judges, and academics. Because of the potentially enormous impact of the alternative minimum tax (AMT) on discrimination lawsuit recoveries, however, the gross up issue is now beginning to appear in reported cases.

The three principal federal anti-discrimination statutes - Title VII, the …

"More Mighty Than The Waves Of The Sea": Toilers, Tariffs, And The Income Tax Movement, 1880-1913, Ajay K. Mehrotra

Articles by Maurer Faculty

No abstract provided.

Book Review: Tax Stories: An In-Depth Look At Ten Leading Federal Income Tax Cases, Kim Brooks

Articles, Book Chapters, & Popular Press

This piece is a book review of Tax Stories, a book edited by Paul L. Caron. It reviews the contributions of Tax Stories, and provides a summary of each of the book's ten chapters, comparing the American tax cases discussed to the Canadian treatment of the same issues.

Business Law Reform In The United States: Thinking Too Small?, Douglas C. Michael

Law Faculty Scholarly Articles

Dean Johan Henning presents the South African experience with business entity reform as one part of a coordinated whole. It included, for example, government funding for business, tax reforms, accounting and securities changes. Henning says that these reforms, though multi-faceted, had a uniform purpose: to use small business as an engine to improve the economy and to move “historically and socially disadvantaged groups” into the mainstream of the economy and the society.

These are noble goals and far reaching efforts, and a lot to ask of business entity reform. But because the South African experience was nonetheless successful by all …

The Working Poor Are Paying For Government Benefits: Fixing The Hole In The Anti-Poverty Purse, Francine J. Lipman

Scholarly Works

No abstract provided.

Rendering Unto Caesar Or Electioneering For Caesar--Loss Of Church Tax Exemption For Participation In Electoral Politics, Alan L. Feld

Faculty Scholarship

The restriction on church participation in political campaigns contained in the Internal Revenue Code operates uneasily. It appears to serve the useful purpose of separating the spheres of religion and electoral politics. But the separation often is only apparent, as churches in practice signal support for a particular candidate in a variety of rays that historically have not cost them their exemptions. Although the limited enforcement by the Internal Revenue Service has reflected the sensitive nature of the First Amendment values present, the federal government should provide more formal elaboration by statute or regulation. Focus on the use of funds …

The Roth Ira Cuts Federal Revenues, With No Benefit To Taxpayers, Michael Waggoner

Publications

No abstract provided.

The Phoenix And The Perils Of The Second Best: Why Heightened Appellate Deference To Tax Court Decisions Is Undesirable, Steve R. Johnson

Articles by Maurer Faculty

In our judicial structure, both courts of general jurisdiction and specialized courts are empowered to adjudicate federal income tax controversies. A proper relationship among those courts has proved difficult to forge and maintain. Absent an enduring intellectual and political consensus, institutional arrangements have been subject to recurring question and challenge.

1969: The Birth Of Tax Reform, Mark W. Cochran

Faculty Articles

This narrative poem framed from Robert Penn Warren’s epic poem, “Brother to Dragons,” transforms Warren’s poem into a satirical take on tax reform covering the origins, implementation, effectiveness, and future of American tax reform legislation. The poem begins by highlighting economic, political, social, and pop culture events from the American 1960s. The author discusses the emergence of and reasons for tax reform detailing the policy behind reform along with the positive and negative aspects of the original Tax Reform Act of 1969. The first reform attempted to curtail tax shelters by limiting risk write-offs, but exceptions in the reformation allowed …

Determining An Individual's Federal Income Tax Liability When The Tax Benefit Rule Applies: A Fifty-Year Checkup Brings A New Prescription For Calculating Gross, Adjusted Gross, And Taxable Incomes, Matthew J. Barrett

Journal Articles

The tax benefit rule should be described to indicate that it applies to credits and exclusions besides deductions, and deduction recoveries should be reported in the same location as was affected initially. The recovery should not affect gross income, for the purpose of tax equity. The recovery should rather affect either taxable income or adjusted gross income. The IRS and the courts should adopt this new description and principles.

Taxation Of Business Rent, George Mundstock

Articles

No abstract provided.

Over The Back Fence: Tax Shelters And Other Sales Of Federal Income Tax Reductions, Thomas A. Robinson

Articles

No abstract provided.

The Issuer's Paper: Property Or What? Zero Basis And Other Income Tax Mysteries, Elliott Manning

Articles

No abstract provided.

The Tax Benefit Of Bliss, Alan L. Feld

Faculty Scholarship

In recent years the Supreme Court has limited its substantive decisions in federal income tax matters.^I For the most part, the handful of tax cases it has considered each year deal with collection, liens, or other issues peripheral to doctrinal development in the tax area.² The Court's recent decision in Diedrich v. Commissioner,³ however, dealt with a realization question involving net gifts; and its grant of certiorari consolidating the cases of Bliss Dairy, Inc. v. United States and Hillsboro National Bank v. Commissioner⁴ promises a continuing interest in substantive tax law. Bliss Dairy will enable the …

Valuing Oil And Mineral Interests For Estate Planning Purposes, Lawrence H. Averill

Faculty Scholarship

In this article, the author discusses a number of factors which should be considered when valuing oil and mineral interests, with a primary emphasis on estate planning concerns. The article to a large extent focuses on the various techniques utilized in the valuation process, and in so doing, considers a number of key concepts and terms and identifies problems which commonly arise in the valuation of oil and mineral assets.