Law Commons^™

Advance Trade Discounts: A Reprise, Deborah A. Geier

Law Faculty Articles and Essays

Prof. Deborah A. Geier, in a response to a recent article by Robert Willens on advance trade discounts, discusses the differences between the courts' analyses and some academics' approaches to measuring the income tax base properly.

Tax Treaty Treatment Of Royalty Payments From Low-Income Countries: A Comparison Of Canada And Australia’S Policies, Kim Brooks

Articles, Book Chapters, & Popular Press

The proposal made in this paper is a modest one: that high-income countries should further the cause of reducing global inequality by ensuring that in their tax treaties with low-income countries they do not usurp needed revenues by reducing low-income countries' ability to collect tax on income with a source in the low-income country. This argument is made in the specific context of the taxation of royalty payments, which present one of the most extreme examples of high-income countries unfairly confiscating revenues that appropriately belong to their low-income treaty partners. The Organisation for Economic Co-operation and Development (OECD) model tax …

Selected Energy Tax Credit Provisions In The Internal Revenue Code

William & Mary Annual Tax Conference

No abstract provided.

Client Alert- Irs Issues Safe Harbor Guidance For Partnership Flip Structures In Wind Deals

William & Mary Annual Tax Conference

No abstract provided.

Primer On Energy Tax Credits, Laura Ellen Jones

William & Mary Annual Tax Conference

No abstract provided.

Creative Structures For The Disposition Of Real Estate (Slides)

William & Mary Annual Tax Conference

No abstract provided.

Creative Structures For The Disposition Of Real Estate: Extracting Equity On A Tax-Free Basis, Blake D. Rubin, Andrea M. Whiteway, Jon G. Finkelstein

William & Mary Annual Tax Conference

No abstract provided.

Tax Planning For The Philanthropically Minded Business Owner, C. Wells Hall Iii

William & Mary Annual Tax Conference

No abstract provided.

The Commerciality Doctrine As Applied To The Charitable Tax Exemption For Homes For The Aged: State And Local Tax Perspectives, David A. Brennen

Law Faculty Scholarly Articles

This essay examines the question of how state and local government officials should consider federal tax law principles, like the commerciality doctrine, when they challenge state and local property tax exemptions that rely, at least in part, on tax-exempt charitable status for federal income tax purposes. In particular, this essay uses the example of continuing care retirement communities to consider tax-exempt law’s commerciality doctrine in an attempt to discern distinctions between “homes for the aged” that are “charitable,” and thus entitled to exemption, and those that are too commercial, and thus not entitled to exemption. In fact, one might say …

Genes As Tags: The Tax Implications Of Widely Available Genetic Information, Kyle D. Logue, Joel B. Slemrod

Law & Economics Working Papers Archive: 2003-2009

This paper examines how progress in genetics' specifically, the proliferation of knowledge about the human genome' may influence the feasibility and desirability of a tax that is based on individual human endowments or ability. The paper explores various forms that such a genetic endowment tax-and-transfer regime might take and identifies some of the benefits and costs of such a regime. The authors take no position on whether a genetic endowment tax would be desirable or not. However, one contribution of the paper is to observe that current law in the U.S., which restricts the use of genetic information by insurers …

The Commerciality Doctrine As Applied To The Charitable Tax Exemption For Homes For The Aged: State And Local Perspectives, David A. Brennen

Scholarly Works

This essay examines the question of how state and local government officials should consider federal tax law principles, like the commerciality doctrine, when they challenge state and local property tax exemptions that rely, at least in part, on tax-exempt charitable status for federal income tax purposes. In particular, this essay uses the example of CCRCs [continuing care retirement communities] to consider tax-exempt law's commerciality doctrine in an attempt to discern distinctions between “homes for the aged” that are “charitable,” and thus entitled to exemption, and those that are too commercial, and thus not entitled to exemption. In fact, one might …

Another Take On The Mortgage Debt Relief Situation, Deborah A. Geier

Law Faculty Articles and Essays

Prof. Deborah A. Geier responds to Prof. Stephen Cohen's viewpoint on the mortgage debt relief debate.

It-Apas: Harmonizing Inconsistent Transfer Pricing Rules In Income Tax - Customs - Vat, Richard Thompson Ainsworth

Faculty Scholarship

In most jurisdictions there are three separate spheres of transfer pricing analysis - income tax, customs and VAT. Although they share policy objectives, terminology and frequently borrowing methodologies from one another these domestic transfer pricing systems are not in harmony.

Businesses find this lack of harmony costly, problematical, but also a planning opportunity. The door is open for arbitrage.

What if the transfer pricing rules within a jurisdiction were harmonized? The World Customs Organization (WCO) and the Organization of Economic Cooperation and Development (OECD) are considering this question.

This paper synthesizes the range of transfer pricing regimes currently in use, …

Uk Car-Flipping: The Vat Fraud Market-Place And Certified Solutions, Richard Thompson Ainsworth

Faculty Scholarship

Missing Trader Intra-Community (MTIC) fraud and its offspring carousel fraud and contra trading fraud are siphoning huge amounts of VAT revenue from the UK Treasury. This fraud is not a function of the goods involved. It is a function of the market-place. Recently another type of market-place dependent VAT fraud has taken hold in the UK - car-flipping.

In some instances the market-place where these frauds festers is a pre-existing or natural market-place, one that grows out of legitimate commercial practices. Fraudsters enter this market-place (so the argument goes) and take advantage of legitimate businesses who unwittingly get caught up …

Expensing And The Interest Deduction, Deborah A. Geier

Law Faculty Articles and Essays

The difficulty of envisioning an effective provision that would deny interest deductions in this context may be reason enough to advocate for the alternative proposal described at the beginning of this viewpoint. The mixing of consumption tax provisions with the income tax treatment of debt in the U.S. tax system already provides too many opportunities for tax arbitrage. The expensing proposal would exacerbate these problems. The alternative proposal of broadening the base and lowering the rates (especially if coupled with eliminating the capital gains preference and integrating the corporate and individual taxes) would go far toward reducing the unfortunate mixing …

Business Income (Article 7 Oecd Mc), Reuven S. Avi-Yonah, Kimberly A. Clausing

Law & Economics Working Papers Archive: 2003-2009

The 2006 OECD Report on attribution of profits to permanent establishments states that its recommendation “was not constrained by either the original intent or by the historical practice and interpretation of Article 7.” Moreover, the Report recommends a redrafting of both the Article itself and the Commentary. Given this, it seems appropriate to begin by asking: If we were working on a clean slate, what would be the best way to tax MNEs at source in the light of 21st century business practices?

The beginning point has to be that a modern MNE does not operate as if its constituent …

All In The Family As Single Shareholder Of An S Corporation, Jeffrey H. Kahn, Douglas H. Kahn, Terrence G. Perris

Scholarly Publications

No abstract provided.

Well-Being, Inequality And Time: The Time-Slice Problem And Its Policy Implications, Matthew D. Adler

All Faculty Scholarship

Should equality be viewed from a lifetime or “sublifetime” perspective? In measuring the inequality of income, for example, should we measure the inequality of lifetime income or of annual income? In characterizing a tax as “progressive” or “regressive,” should we look to whether the annual tax burden increases with annual income, or instead to whether the lifetime tax burden increases with lifetime income? Should the overriding aim of anti-poverty programs be to reduce chronic poverty: being badly off for many years, because of low human capital or other long-run factors? Or is the moral claim of the impoverished person a …

Tax Magic: Did Billy Donovan Pull Income Out Of A Hat?, Jeffrey H. Kahn, Joshua P. Fershee

Scholarly Publications

No abstract provided.

A Proposal To Adopt Formulary Apportionment For Corporate Income Taxation: The Hamilton Project, Reuven S. Avi-Yonah, Kimberly Clausing

Law & Economics Working Papers Archive: 2003-2009

The current system of taxing the income of multinational firms in the United States is flawed across multiple dimensions. The system provides an artificial tax incentive to earn income in low-tax countries, rewards aggressive tax planning, and is not compatible with any common metrics of efficiency. The U.S. system is also notoriously complex; observers are nearly unanimous in lamenting the heavy compliance burdens and the impracticality of coherent enforcement. Further, despite a corporate tax rate one standard deviation above that of other OECD countries, the U.S. corporate tax system raises relatively little revenue, due in part to the shifting of …

Congress's Transformative Republican Revolution In 2001-2006 And The Future Of One-Party Rule, Charles Tiefer

All Faculty Scholarship

In 2001 - 2006, Republican leadership in the legislature circumvented procedural norms to implement an ideological agenda that precluded the minority party from making alternative proposals and voicing criticisms. With the Republican majority in the Senate falling to 50-50 in 2000, President Bush's assumption of office, despite having lost the popular vote, set the tone for what would become an era of illegitimate procedural reform cloaked in secrecy and deniability. Through closed-door conferences and closed-rules, Republican leadership in the House and Senate turned the clock back on civil liberties, passed unfavorable and convoluted tax cuts, and used transformed health care …

Social Security Reform: Fundamental Restructuring Or Incremental Change?, Kathryn L. Moore

Law Faculty Scholarly Articles

In light of Social Security's long-term deficit, reform of the system appears inevitable. Commentators and policymakers have offered a wide range of possible reforms. This Article describes and analyzes five possible types of reform: (1) individual accounts, (2) progressive price indexing, (3) general revenue and/or estate tax revenue financing, (4) increasing the maximum taxable wage base, and (5) increasing the normal retirement. The Article opposes the first two proposed changes, individual accounts and progressive price indexing, because they would fundamentally restructure the current system. The Article recommends that Social Security's financing difficulties be addressed by a combination of estate tax …

Controlling Executive Compensation Through The Tax Code, Gregg D. Polsky

Scholarly Works

This article analyzes Internal Revenue Code § 162(m), which in general denies public companies a deduction for annual non-performance-based compensation in excess of $1,000,000 paid to senior executive officers. Congress enacted § 162(m) with the intent to reduce the overall level of executive compensation and to influence the composition of executive compensation in favor of components that are more sensitive to firm performance. Notably, § 162(m) represents the most direct Congressional effort to influence executive compensation design. In light of recent events, Congress is being called upon to once again address the perceived problem of overgenerous executive pay packages. Accordingly, …

Naked And Covered In Monte Carlo: A Reappraisal Of Option Taxation, Eric D. Chason

Faculty Publications

The market for equity options and related derivatives is staggering, covering trillions of dollars worth of assets. As a result, the taxation of these instruments is inherently important. Moreover, the importance is made even more acute by the use of options in creating more complex transactions and in avoiding taxes. Consider an equity call option, which entitles, but does not obligate, its holder to buy stock at a set price at a set time in the future. Option theory gives us a way to break the option down into more fundamental units. For example, an equity call option over 10,000 …

Freakonomics And The Tax Gap: An Applied Perspective, Leslie Book

Working Paper Series

Over the past thirty years, a significant amount of research from a variety of social science disciplines has considered tax compliance. Economists, psychologists, and sociologists have contributed to the discussion, offering research and, at times, conflicting explanations regarding whether a person is likely to comply with his obligation to file an accurate tax return. The unifying theme among this research is a search for explanatory reasons which are the factors that lead to non-compliance. In broad terms, the economic models of tax compliance assume rational behavior, and that people will coldly consider compliance from the perspective as to whether the …

Thinking About Conflicting Gravitational Pulls Litcs: The Academy And The Irs, Nancy S. Abramowitz

Articles in Law Reviews & Other Academic Journals

This article addresses the tension between educational and public service goals in the immediate term for tax clinics receiving funding from the Low Income Taxpayer Clinic (“LITC”) program under Internal Revenue Code §7526. The author expresses concern that the LITC Program Office will over emphasize the “number-of-taxpayers served” factor in program evaluation, thereby putting academic clinics at a distinct disadvantage in seeking and/or retaining program funds. By imposing these types of “productivity” measures, there is a tendency to force that particular type of activity, thereby significantly disrupting what otherwise might be a better or different educational model for the use …

Professor Janet Spragens: In Memory Of A Friend, In Celebration Of An Idea, Nancy S. Abramowitz

Articles in Law Reviews & Other Academic Journals

This article is a tribute to the career and contributions of Professor Janet Spragens, who created the Federal Tax Clinic at the American University, Washington College of Law (WCL). During testimony before the historic Internal Revenue Service Restructuring Commission, Prof. Spragens advised the Commission to create better education of the public and greater availability of free advocacy for low-income taxpayers through federal funding of more clinics. In its landmark legislation of 1998, Congress responded to this testimony with the enactment of 26 U.S.C. §7526, which authorized a program to fund academic and pro bono clinics working to educate non-native English …

No Wealthy Parent Left Behind: An Analysis Of Tax Subsidies For Higher Education, Andrew Pike

Articles in Law Reviews & Other Academic Journals

This article analyzes the status in 2007 of higher education costs in relation to U.S. taxation policy and the declining real income and ability of lower and middle income taxpayers to pay tuition and fees. Then-current tax policy lessened support for families with the greatest financial need while providing much greater levels of support to those with greater financial resources. To enhance distributional fairness, the author proposes that Congress repeal tax provisions that have this effect and consolidate the separate sources of federal financial aid grants into one program--an expanded Pell Grant program. He also advises that Congress make the …

What's Good For The Goose Is Not Good For The Gander: Sarbanes-Oxley-Style Nonprofit Reforms, Lumen N. Mulligan

Faculty Works

In this article, I contend that these Sarbanes-Oxley-inspired, state, nonprofit reforms, particularly the costly disclosure requirements, will be of little value in the effort to improve ethical nonprofit board governance. The article proceeds as follows. Part II provides a primer on the oversight of nonprofit organizations. Part III reviews the recent Sarbanes-Oxley-like nonprofit reforms introduced in seven states. Part IV contends that the disclosure-focused reforms, which form the bulwark of these acts, will not foster ethical nonprofit board governance. Part V argues that this failure stems from the inappropriate application of a stockholder-based, normative perspective in the nonprofit sector. The …

Optimal Tax Compliance And Penalties When The Law Is Uncertain, Kyle D. Logue

Articles

This article examines the optimal level of tax compliance and the optimal penalty for noncompliance in circumstances in which the substance of the tax law is uncertain - that is, when the precise application of the Internal Revenue Code to a particular situation is not clear. In such situations, a number of interesting questions arise. This article will consider two of them. First, as a normative matter, how certain should taxpayers be before they rely on a particular interpretation of a substantively uncertain tax rule? If a particular position is not clearly prohibited but neither is it clearly allowed, what …