Tax Law Commons^™

Section 179 Expensing And The Bonus Depreciation Allowance: Their Application, History, Costs, And Benefits., Alice E. Keane

Alice E. Keane

This article examines Section 179 expensing and the bonus depreciation allowance, tax incentives that allow businesses to dramatically accelerate deductions on purchases of most tangible property. Generally, Section 179 expensing benefits smaller businesses, while the bonus depreciation allowance, which is more controversial and costly, is more useful to larger businesses and C corporations. Both of these tax incentives expired at the end of 2014. Congress is currently considering bills that would extend these incentives retroactively to 2015 and beyond. There is conflicting evidence of the benefit to the economy of Section 179 expensing and the bonus depreciation allowance, with certain …

Tax Treatment Of Derivative Instruments, Oluwaseun Viyon Ojo

Oluwaseun Viyon Ojo

The article provides an analysis of the various types of derivative instruments traded on the capital markets. As derivative instruments become frequently tradable in the Nigerian Financial market in the near projected future, it is expedient that the concerned companies plan adequately for the tax implications of such transactions and the appropriate tax authorities know how to treat the instrument of derivatives for the purpose of imposition of relevant taxes. This paper therefore dealt with the treatment of these instruments under the Capital Gains Tax Act (CGTA) and Companies Income Tax Act (CITA), though there are no specific rules for …

Is The Chief Justice A Tax Lawyer?, Stephanie Hoffer, Christopher J. Walker

Christopher J. Walker

King v. Burwell is a crucial victory for the Obama Administration and for the future of the Affordable Care Act. It also has important implications for tax law and administration, as explored in the other terrific contributions to this Pepperdine Law Review Symposium. In this Essay, we turn to another tax-related feature of the Chief Justice’s opinion for the Court: It is hard to ignore the fingerprints of a tax lawyer throughout the opinion. This Essay focuses on two instances of a tax lawyer at work.

First, in the Chief’s approach to statutory interpretation one sees a tax lawyer as …

Simple Substantial Economic Effect Regulatory Compliance, David Randall Jenkins

David Randall Jenkins

The Internal Revenue Service considers Section 704(b)’s substantial economic effect regulations among the most complex. This course teaches the Treasury Regulations enable simple compliance through (Per Capita: Balances: Ratios) capital account accounting method truncated transitivity, economic effect equivalence, and substantiality’s conclusive presumption. The partnership special allocations public policy mandate is made clear thereby: encourage going concern productivity while discouraging its abandonment.

Contractual Option Interests And Capital Gains Tax In Nigeria, Dr Obayemi K. Olumide, Oluwaseun Viyon Ojo, Tobi Michael Babalola

Oluwaseun Viyon Ojo

Capital gains are the profits realized from the sale of chargeable assets at a price which exceeds and is higher than the purchase price, and so, when a capital asset is sold, the difference between the cost price (purchase price, including acquisition costs) and the sales price (selling costs) is a capital gain or a capital loss, because a taxpayer realizes a capital gain if sales price is higher than cost of sale, while the reverse is the case for a capital loss. While substantial revenue can be realized from capital gains tax (CGT), there are challenges facing CGT in …

An Overview Of Taxation Of Non-Resident Company In Nigeria, Oluwaseun Viyon Ojo

Oluwaseun Viyon Ojo

Non-resident companies, though not incorporated in Nigeria but deriving income from the Nigerian economic environment, is subject to tax within the nigerian tax environment under the specific circumstances set out in the provisions of the Companies Income Tax Act. Thus, this paper deals with the specific circumstances under which the non-resident companies will be subject to taxes in Nigeria.

Through The Lens Of Innovation, Mirit Eyal-Cohen

Mirit Eyal-Cohen

The legal system constantly follows the footsteps of innovation and attempts to discourage its migration overseas. Yet, present legal rules that inform and explain entrepreneurial circumstances lack a core understanding of the concept of innovation. By its nature, law imposes order. It provides rules, remedies, and classifications that direct behavior in a consistent manner. Innovation turns on the contrary. It entails making creative judgments about the unknown. It involves adapting to disarray. It thrives on deviations as opposed to traditional causation. This Article argues that these differences matter. It demonstrates that current laws lock entrepreneurs into inefficient legal routes. Using …

An Invisible Hand Behind: The Myth Of The Chinese Tax System, Yan Xu

Yan XU

To the casual observer, China in 2014 bears little resemblance to imperial society in place two thousand years ago. The agrarian rural society that dominated until recently has shifted to an urbanized services and manufacturing society. The emperor is long dead, along with the Republic government that followedand the subsequent Communist regime has morphed into Party led oligarchy guiding a state controlled market economy. A closer look, however, reveals a remarkable continuity of features. It seems that some aspects of life in China are more resistant to change and the continuity of these features to today indicates that some fundamental …

Lessons In Fiscal Activism, Mirit Eyal-Cohen

Mirit Eyal-Cohen

This article highlights an anomaly. It shows that two tax rules aimed to achieve a similar goal were introduced at the same time. Both meant to be temporary and bring economic stimuli but received a dramatically different treatment. The economically inferior rule survived while its superior counterpart did not. The article reviews the reasons for this paradox. It shows that the causes are both political and an agency problem. The article not only enriches an important and ongoing debate that has received much attention in recent years, but also provides important lessons to policymakers.

The Family Llc: A New Approach To Insuring Dynastic Wealth, Evan M. Purcell

Evan M Purcell

No abstract provided.

A Whole New World: Income Tax Considerations Of The Bitcoin Economy, Benjamin W. Akins Jd, Llm, Jennifer L. Chapman Jd, Cpa, Jason M. Gordon Jd, Mba

Benjamin W. Akins

Bitcoin is a virtual, cryptocurrency growing rapidly in influence throughout the world. Numerous characteristics associated with the bitcoin system, including low transaction costs and greater user privacy, make it appealing as a medium of electronic payment. The number of users of bitcoin, including merchants accepting the currency as a form of payment, has grown considerably in recent years. Estimates indicate that there are more than 60,000 active bitcoin users as of September 2012, with nearly 11 million bitcoins in existence. According to the latest estimates, bitcoin market capitalization is roughly $9 billion. The growth of bitcoin as an accepted currency …

Shut Up: Pay More: This What You Voted For. Why You Don't See Me At San Francisco's Hall Of Justice, David D. Butler

David D. Butler

Urban violence, much of it politically motivated, has driven the taxpaying Middle Class into the suburbs. This has left only the tax eating poor and the tax avoiding rich in the big cities. This has resulted in urban bankruptcy in Detroit and even in California with its gifts of the technological Gold Rush, the Pacific Ocean, and the Sierra Nevada and Santa Lucia Mountains. The poor are more issolated than ever confined to the functional equivalent of no go zones. They speak a differenct language, dress differently, and sell drugs until they are caught and caged, providing good pay and …

Building Prohibited Transaction Chinese Walls For Retirement Plan Investment Structures, David Randall Jenkins

David Randall Jenkins

Knowing how to structure client career revising strategies by funding business ventures with extant retirement plan assets is an important transaction structuring tool for today’s professional. Enabling both account holder compensation and personal guaranties of enterprise debt appears to be a formidable undertaking in today’s decisional law climate. The key to empowering such client objectives lies in understanding how retirement plan management and investment risk diversification policy compliance, together with properly invoked plan asset rule exceptions, erect Prohibited Transaction Chinese Walls and enable (self-dealing activity: incidental benefit) transitions.

Internal Revenue Service Acknowledges Involvement In Jenkins Related Judicial Martial Law Activities, David Randall Jenkins

David Randall Jenkins

Jenkins applied to the Internal Revenue Service as the responsible party for his firm, Algorithm LLC, to become an IRS authorized e-­‐‑file provider. Prior to its e-­‐‑file provider application response, the agency had approved Algorithm LLC (RDAWB) as a continuing education provider based on Jenkins’ academic credentials. On May 22, 2015, however, the Internal Revenue Service responded to the Algorithm LLC e-­‐‑file provider application by rejecting it. The basis for the rejection was the Federal Bureau of Investigation report on Jenkins’ criminal background.On June 3, 2015, Jenkins filed a timely appeal of the IRS May 22, 2015 rejection of the …

Taxes And Takings - And First Principles, George B. Hefferan Jr

George B Hefferan Jr

No abstract provided.

Taxes And Takings - And First Principles, George B. Hefferan Jr

George B Hefferan Jr

Public school property taxes are a verifiable violation of the takings clauses of the state and federal constitutions.

Public Act 231 Of 2008: Proposed Policy Reform To Address The Ever-Increasing Obesity Rates In Michigan, Rachele M. Hendricks-Sturrup

Rachele M Hendricks-Sturrup

In order to address the growing problem of obesity in the state of Michigan, Michigan implemented Public Act 231 of 2008 (Senate Bill 294, Amendment to the Commercial Rehabilitation Act) (hereinafter referred to as “Public Act 231”). Public Act 231 introduces a property tax incentive that seeks to increase access to affordable, healthful foods in rural and low-income urban areas (S. 294, 2008). Given recent facts stating that obesity rates in Michigan have steadily increased between years 2008-2013, it is apparent that the tax incentive under Public Act 231 has had very little impact in effectively tackling the obesity problem …

The Rescission Doctrine: Everything Old Is New Again, Allen Sparkman

Allen Sparkman

This paper considers rescissions--attempts by parties to undo a transaction and have that undoing respected for federal tax purposes. Some commentators have questioned the legal basis for the rescission doctrine as applied by the Internal Revenue Service, and others have argued for expansion or restriction of the doctrine. This paper traces the development of the rescission doctrine, examines a critical article that argues that there is no legal precedent that truly supports the rescission doctrine as it is currently applied by the Internal Revenue Service, considers whether there exists sufficient legal authority for the doctrine as applied by the Internal …

Exotic Dancing: Taxable Gyrations Or Exempt Art, John O. Hayward

John O. Hayward

Exotic dancers usually embroil themselves in censorship battles with local authorities. But recently they have drawn the attention of tax authorities who have tussled with the owners of so-called “gentlemen’s clubs” over whether the exotic dancing performed in their establishments are subject to taxation. This paper examines several recent cases where state authorities choose to tax exotic dancing while at the same time exempting what some jurists regard as comparable choreographic performances. In the opinion of these commentators, the tax authorities exhibited a bias against low-brow artistic expression, thus engaging in impermissible content discrimination. It advances the proposition that judges …

The Origins Of Affirmative Fiscal Action, Mirit Eyal-Cohen

Mirit Eyal-Cohen

This article highlights an anomaly. It shows that two tax rules aimed to achieve a similar goal were introduced at the same time. Both meant to be temporary and bring economic stimuli, but received a dramatically different treatment. The less efficient or economically inferior survived. Its superior counterpart did not. The article reviews the reasons for this paradox. It shows that the reason is both political and an agency problem. The article not only enriches an important and ongoing debate that has received much attention in recent years, but also provides important lessons to policymakers.

Marriage Penalty: How Stacking Income Affects The Secondary Earner’S Decision To Work, Kevin M. Walsh

Kevin M Walsh

Our progressive tax rate structure is aimed at taxing citizens fairly and based on their ability to pay. The rate structure, however, partially loses its purpose when analyzing the income taxation of married individuals. If a married couple decides to file jointly they are sometimes taxed at higher rates than individuals are depending on the incomes of the couple. This has created what we know today as the “marriage penalty,” and it can serve as a deterrent to the secondary earner from working.

There is no simple solution to address how the marriage penalty, in combination with necessary expenses, affects …

Renewable Energy: Where We Are Now And How Renewable Energy Investment And Development Can Be Expanded, Kevin M. Walsh

Kevin M Walsh

The renewable energy field is currently stifled because many renewable energy developments require tax equity investors to provide additional funds to get the project off the ground and running. The Code provides tax credits to incentivize investors to invest. Currently, the Investment Tax Credit (“ITC”) is the only available credit left for renewable projects placed in service from 2014 on. Tax credits are a step in the right direction to encourage renewable investment; however, the credits are limited in application mostly to large financial institutions. Moreover, investments into one specific renewable energy project can be risky because there is no …

Navigating A Post-Windsor World: The Promise And Limits Of Marriage Equality, Nancy J. Knauer

Nancy J. Knauer

When the 2013 landmark decision in U.S. v. Windsor invalidated part of the Defense of Marriage Act (DOMA), it was hailed as a landmark civil rights victory, but its implementation has been far from seamless. The federal government has not applied a uniform rule for marriage recognition, applying a state-of-domicile rule for some purposes (Social Security) and a broader state-of-celebration rule for others (e.g., federal tax matters). Moreover, Windsor did not directly address the state-level marriage prohibitions that remain in place in the majority of states. As a result, the United States continues to be a patchwork of marriage laws …

The Intriciacies Of Tax And Globalization, Sagit Leviner Dr.

Sagit Leviner Dr.

This article reviews Avi-Yonah, Sartori, and Marian’s Global Perspectives on Income Taxation Law (Oxford, 2011). It outlines the book’s key features and strengths in the quest for understanding the effect of globalization on taxation. In this process, the article also looks into available data to explore global trends in taxation over the past three and a half decades to evaluate whether and to what extent globalization leads to convergence or divergence of national tax policies. The article concludes that as Global Perspectives on Income Taxation Law illustrates, while globalization may lead to at least some observed trends in taxation—including the …

Curb Your Enthusiasm For Pigouvian Taxes, Victor Fleischer

Victor Fleischer

Pigouvian (or "corrective") taxes have been proposed or enacted on dozens of products and activities that may be harmful in excess: carbon, gasoline, fat, sugar, guns, cigarettes, alcohol, traffic, zoning, executive pay, and financial transactions, among others. Academics of all political stripes are mystified by the public’s inability to see the merits of using Pigouvian taxes more frequently to address serious social harms.

This enthusiasm for Pigouvian taxes should be tempered. A Pigouvian tax is easy to design—as a uniform excise tax—if one assumes that each individual causes the same amount of harm with each incremental increase in activity on …

Virtual Currencies: Bitcoin & What Now After Liberty Reserve, Silk Road, And Mt. Gox?, Lawrence J. Trautman

Lawrence J. Trautman Sr.

During 2013, the U.S. Treasury Department evoked the first use of the 2001 Patriot Act to exclude virtual currency provider Liberty Reserve from the U.S. financial system. This article will discuss: the regulation of virtual currencies; cybercrimes and payment systems; darknets, Tor and the “deep web;” Bitcoin; Liberty Reserve; Silk Road and Mt. Gox. Virtual currencies have quickly become a reality, gaining significant traction in a very short period of time, and are evolving rapidly. Virtual currencies present particularly difficult law enforcement challenges because of their: ability to transcend national borders in the fraction of a second; unique jurisdictional issues; …

Less Is More: Applying A Modified Reasonable Compensation Standard To Eliminate The Inconsistencies In The Payroll And Net Investment Income Tax Bases, John S. Treu

John S. Treu

The original policy for the implementation of payroll taxes was to impose a tax on wages as both a funding mechanism for, and a limitation to, qualifying for social security. However, the self-employment tax base developed severe inconsistencies with this original policy and among different tax entities by including certain returns on capital investments in the tax base. At present, different payroll tax obligations arise for similarly situated tax payers based solely on the type of entity the owner elects to be taxed as under the check-the-box regulations. These inconsistencies resulted from misguided efforts by congress and the treasury to …

Comments On Guidance For Tax-Exempt Social Welfare Organizations On Candidate-Related Political Activities, Brian D. Galle, Donald B. Tobin

Brian D. Galle

The Notice is a good first step. It creates bright-line standards that are easy to apply and that will eliminate much of the gray area regarding permissible political activity. Clearer lines will reduce the discretion on the part of the IRS. By decreasing the IRS’s discretion, the regulation will reduce the opportunity for the IRS to be used as a political tool in an Administration’s tool box. However, the Notice does not go far enough. Congress has established a regulatory regime that has as its central purpose the disclosure of any significant campaign contributions by individuals or firms. In recent …

Tax, State, And Utopia, Tsilly Dagan, Avital Margalit

Tsilly Dagan

This article examines the appropriate tax treatment of communities through the unique example of the Israeli kibbutz, a community that is traditionally governed by the maxim "from each according to his ability, to each according to his needs.” The case of the kibbutz highlights the tension between communities and the market in governing human interactions as well as the tension that exists between communities and the state in applying private schemes of redistribution.

The challenge communities pose for tax law is whether, and to what extent, the taxation regime should accommodate a community’s values and practices when they diverge …

Is There A Justification For Imposing Criminal Liability On Corporate Managers In Tax Legislation?, Karnit Malka

Karnit Malka

No abstract provided.