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Articles 1 - 30 of 52
Full-Text Articles in Tax Law
The Economic Ambiguity (And Possible Irrelevance) Of Tax Transition Rules, Eric D. Chason
The Economic Ambiguity (And Possible Irrelevance) Of Tax Transition Rules, Eric D. Chason
Eric D. Chason
No abstract provided.
Tax Policy Analysis Of Bob Jones University V. U.S, Charles O. Galvin, Neal Devins
Tax Policy Analysis Of Bob Jones University V. U.S, Charles O. Galvin, Neal Devins
Neal E. Devins
No abstract provided.
Joint Winners, Separate Losers: Proposals To Ease The Sting For Married Taxpayers Filing Separately, Michelle Lyon Drumbl
Joint Winners, Separate Losers: Proposals To Ease The Sting For Married Taxpayers Filing Separately, Michelle Lyon Drumbl
Michelle L. Drumbl
A taxpayer who is “considered as married” according to the Internal Revenue Code’s definition must file either a joint income tax return or an individual return using the “married filing separately” filing status. Those married taxpayers who file a separate, rather than a joint, income tax return are denied valuable benefits and subjected to a host of other unfavorable limitations. Low-income taxpayers, in particular, are hurt by these limitations. Certain married taxpayers, including victims of domestic violence and abandoned spouses, may have no choice but to file using the married filing separately status. Low-income taxpayers are denied tremendous benefits, such …
Lipstick, Light Beer, And Backloaded Savings Accounts, Karen C. Burke, Grayson M.P. Mccouch
Lipstick, Light Beer, And Backloaded Savings Accounts, Karen C. Burke, Grayson M.P. Mccouch
Grayson McCouch
The article addresses current proposals for expanding tax-preferred individual savings accounts and their implications for retirement security and tax policy. The authors argue that the yield-exempt approach embraced by the Bush Administration in its proposals is likely to generate enormous long-term revenue losses, exacerbate inequalities in income and wealth, and erode broad-based coverage under employer-sponsored retirement plans. In addition to these fiscal and distributional concerns, they conclude that the proposals pose a serious obstacle to fundamental tax reform.
The Moving Target Of Tax Reform, Karen C. Burke, Grayson M.P. Mccouch
The Moving Target Of Tax Reform, Karen C. Burke, Grayson M.P. Mccouch
Grayson McCouch
In 2000, Professor William Turnier proposed a package of three reforms to make the estate tax more “equitable” and “taxpayerfriendly.” All of his proposals—allowing a surviving spouse to inherit a deceased spouse’s unused exemption, replacing the state death tax credit with a deduction, and indexing the exemption for inflation—were eventually enacted. Today, the estate tax remains on the books, but changes in rates and exemptions have severely curtailed its role in the larger federal tax system. Income tax rate reductions for capital gains and dividends have further lightened the tax burden on capital income, and international pressure to reduce the …
A Conceptual Framework For The Regulation Of Cryptocurrencies, Omri Y. Marian
A Conceptual Framework For The Regulation Of Cryptocurrencies, Omri Y. Marian
Omri Y Marian
This Essay proposes a conceptual framework for the regulation of transactions involving cryptocurrencies. Cryptocurrencies offer tremendous opportunities for innovation and development but are also uniquely suited to facilitate illicit behavior. The regulatory framework suggested herein is intended to support (or at least not impair) cryptocurrencies’ innovative potential. At the same time, it aims to disrupt cryptocurrencies’ criminal utility. To achieve these purposes, this Essay proposes a regulatory framework that imposes costs on the characteristics of cryptocurrencies that make them especially useful for criminal behavior (in particular, anonymity) but does not impose costs on characteristics that are at the core of …
Home-Country Effects Of Corporate Inversions, Omri Y. Marian
Home-Country Effects Of Corporate Inversions, Omri Y. Marian
Omri Y Marian
This Article develops a framework for the study of the unique effects of corporate inversions (meaning, a change in corporate residence for tax purposes) in the jurisdictions from which corporations invert ("home jurisdictions"). Currently, empirical literature on corporate inversions overstates its policy implications. It is frequently argued that in response to an uncompetitive tax environment, corporations may relocate their headquarters for tax purposes, which, in turn, may result in the loss of positive economic attributes in the home jurisdiction (such as capital expenditures, research and development activity, and high-quality jobs). The association of tax-residence relocation with the dislocation of meaningful …
Reconciling Tax Law And Securities Regulation, Omri Y. Marian
Reconciling Tax Law And Securities Regulation, Omri Y. Marian
Omri Y Marian
Issuers in registered securities offerings must disclose the expected tax consequences to investors investing in the offered securities (“nonfinancial tax disclosure”). This Article advances three arguments regarding nonfinancial tax disclosures. First, nonfinancial tax disclosure practice, as the Securities and Exchange Commission (the SEC) has sanctioned it, does not fulfill its intended regulatory purposes. Currently, nonfinancial tax disclosures provide irrelevant information, sometimes fail to provide material information, create unnecessary transaction costs, and divert valuable administrative resources to the enforcement of largely-meaningless requirements. Second, the practical reason for this failure is the SEC and tax practitioners’ unsuccessful attempt to address investors’ heterogeneous …
The Relevance Games: Congress's Choices For Economic Substance Gamemakers, Charlene Luke
The Relevance Games: Congress's Choices For Economic Substance Gamemakers, Charlene Luke
Charlene Luke
Codification of the economic substance doctrine in 2010 ushered in a new phase in the debate regarding the meaning and reach of the doctrine. The main statutory hint as to the intended scope of the codified economic substance doctrine is ambiguous, providing, “The determination of whether the economic substance doctrine is relevant to a transaction shall be made in the same manner as if this subsection had never been enacted.” This Article argues that this language should be read in light of the codification history, which stretches back for over ten years before enactment. This history suggests that the relevance …
Repairing Inside Basis Adjustments, Karen C. Burke
Repairing Inside Basis Adjustments, Karen C. Burke
Karen Burke
Optional basis adjustments under Subchapter K have come under increased scrutiny as a result of tax shelter abuses involving partnerships. Recent legislation requires mandatory adjustments under sections 734(b) and 743(b) upon certain distributions of partnership property and transfers of partnership interests. These amendments were targeted at situations in which the failure to make such adjustments potentially gave rise to duplication of losses. While preventing loss duplication may be particularly urgent, these anti-tax-shelter measures represent a retreat from broader proposals calling for mandatory section 734(b) adjustments for both current and liquidating distributions. In a recent article, Professor Abrams criticizes the common …
Contributions, Distributions, And Assumption Of Liabilities: Confronting Economic Reality, Karen C. Burke
Contributions, Distributions, And Assumption Of Liabilities: Confronting Economic Reality, Karen C. Burke
Karen Burke
To combat a relatively arcane international tax-shelter abuse, Congress recently amended Code sections 357 and 362 governing contributions of encumbered property to a corporation. This Article offers a critical assessment of the recent amendments to the liability assumption rules of section 357 and corresponding basis provisions of section 362. Part I explores the divergence between the former liability assumption rules and the "economic benefit" doctrine of the section 1001 regulations. Part II focuses on the technical definition of assumption of recourse and nonrecourse liabilities under amended section 357(d). Part III examines the corollary basis provisions of section 362, as modified …
Exculpatory Liabilities And Partnership Nonrecourse Allocations, Karen C. Burke
Exculpatory Liabilities And Partnership Nonrecourse Allocations, Karen C. Burke
Karen Burke
The rise of limited liability companies (LLCs) classified as partnerships for federal income tax purposes challenges traditional assumptions concerning the treatment of recourse and nonrecourse liabilities under Subchapter K. The complex rules of sections 704(b) and 752 give little attention to liabilities that are recourse to the entity under section 1001 but for which no member bears the economic risk of loss under section 752. In comparison to traditional general or limited partnerships, however, LLCs are much more likely to incur such "exculpatory" liabilities because of the limited liability shield under state law. Although exculpatory liabilities are functionally quite similar …
The Sound And Fury Of Carried Interest Reform, Karen C. Burke
The Sound And Fury Of Carried Interest Reform, Karen C. Burke
Karen Burke
Of all the proposals advanced in recent years to reform Subchapter K, the part of the Internal Revenue Code governing partnership tax, perhaps none has generated more acrimony and confusion than the pending carried interest legislation contained in proposed § 710. While reformers have framed the issue of taxing the compensatory portion of a service partner's return as ordinary income in terms of distributive justice, critics have been quick to invoke the rhetoric of class warfare to fend off reform. In the most elementary terms, the carried interest legislation would tax some (but not all) of a service partner's share …
Lipstick, Light Beer, And Backloaded Savings Accounts, Karen C. Burke, Grayson M.P. Mccouch
Lipstick, Light Beer, And Backloaded Savings Accounts, Karen C. Burke, Grayson M.P. Mccouch
Karen Burke
The article addresses current proposals for expanding tax-preferred individual savings accounts and their implications for retirement security and tax policy. The authors argue that the yield-exempt approach embraced by the Bush Administration in its proposals is likely to generate enormous long-term revenue losses, exacerbate inequalities in income and wealth, and erode broad-based coverage under employer-sponsored retirement plans. In addition to these fiscal and distributional concerns, they conclude that the proposals pose a serious obstacle to fundamental tax reform.
Taxing Hot Asset Shifts, Karen C. Burke
Taxing Hot Asset Shifts, Karen C. Burke
Karen Burke
The Article comments on I.R.S. Notice 2006-14 which proposes to simplify and rationalize the collapsible partnership rules of section 751(b). It concludes that the proposed hot asset sale approach represents much needed improvement of section 751(b) but suggests that the Treasury should also consider more fundamental reform that would treat a nonprorata current distribution as a partial liquidation. The Article also explores the relationship between sections 734(b) and 751(b), focusing on the 1954 ALI proposals and Professor Andrews' more recent proposals concerning hot asset distributions and mandatory basis adjustments. The Article is an outgrowth of the author's work as a …
The Moving Target Of Tax Reform, Karen C. Burke, Grayson M.P. Mccouch
The Moving Target Of Tax Reform, Karen C. Burke, Grayson M.P. Mccouch
Karen Burke
In 2000, Professor William Turnier proposed a package of three reforms to make the estate tax more “equitable” and “taxpayerfriendly.” All of his proposals—allowing a surviving spouse to inherit a deceased spouse’s unused exemption, replacing the state death tax credit with a deduction, and indexing the exemption for inflation—were eventually enacted. Today, the estate tax remains on the books, but changes in rates and exemptions have severely curtailed its role in the larger federal tax system. Income tax rate reductions for capital gains and dividends have further lightened the tax burden on capital income, and international pressure to reduce the …
King V. Burwell And The Rise Of The Administrative State, Ronald D. Rotunda
King V. Burwell And The Rise Of The Administrative State, Ronald D. Rotunda
Ronald D. Rotunda
The Patient Protection and Affordable Care Act (ACA) is a complex law totaling nearly a thousand pages in length. The litigation now before the Supreme Court in King v. Burwell presents, on the surface, a simple issue of statutory interpretation. However, that surface has a very thin veneer. If the Court allows administrators carte blanche to change the very words of a statute, we will have come a long way towards governance by bureaucrats. Over the years, Congress has delegated many of its powers, but it has never delegated the power to raise taxes or spend tax subsidies in ways …
Tax Treatment Of Employment-Related Personal Injury Awards: The Need For Limits, J. Burke, Michael Friel
Tax Treatment Of Employment-Related Personal Injury Awards: The Need For Limits, J. Burke, Michael Friel
Michael Friel
This article examines Section 104(a)(2) of the Internal Revenue Code and the litigation that has centered on the applicability of this Section to payments in settlement or other resolution of employment-related disputes arising out of an employment relationship and accompanied by charges of tortious conduct leveled at one or more of the parties. Part II reviews the origin of amounts received as damages on account of non-physical injuries. Part III analyzes the application of Section 104(a)(2) focusing on how courts have often blurred the distinction between what non-physical injuries are encompassed by the term “personal injury,” and whether a taxpayer …
To Hold Or Not To Hold: Magneson, Bolker, And Continuity Of Investment Under I.R.C. Section 1031, J. Martin Burke, Michael K. Friel
To Hold Or Not To Hold: Magneson, Bolker, And Continuity Of Investment Under I.R.C. Section 1031, J. Martin Burke, Michael K. Friel
Michael Friel
This article examines the judicial and administrative development of the two holding requirements under the continuity of investment standards of section 1031 prior to decisions of the Tax Court and the Ninth Circuit in Magneson v. Commissioner and Bolker v. Commissioner, both of which expanded the boundaries of qualified holding and reemphasized the need for guidance from the Treasury or Congress on these issues. Next the article examines the subsequent impact of these decisions. Finally, the article suggests a standard to be followed in the future.
The Matthew Effect And Federal Taxation, Martin J. Mcmahon Jr.
The Matthew Effect And Federal Taxation, Martin J. Mcmahon Jr.
Martin J. McMahon
The “Matthew Effect” is a synonym for the well-known colloquialism, “the rich get richer and the poor get poorer.” This Article is about the Matthew Effect in the distribution of incomes in the United States and the failure of the federal tax system to address the problem. There has been a strong Matthew Effect in incomes in the United States over the past few decades, with an increasing concentration of income and wealth in the top one percent. Nevertheless, there has been a continuing trend of enacting disproportionately large tax cuts for those at the top of the income pyramid. …
What Would Henry Simons Do?: Using An Ideal To Shape And Explain The Economic Substance Doctrine, Charlene Luke
What Would Henry Simons Do?: Using An Ideal To Shape And Explain The Economic Substance Doctrine, Charlene Luke
Charlene Luke
The law and policy governing tax shelters is incomplete, sometimes contradictory, and occasionally incoherent. Indeed, consensus has yet to emerge even as to which transactions should bear the tax shelter label. Often reform efforts are grounded in theories that are largely external to tax law—for example, economic theory relating to incentives. Fewer approaches rely on intrinsic tax policies, including that most fundamental of income tax principles—the Schanz-Haig-Simons income concept ("H-S"). Under H-S, an income tax base should be expansive, requiring inclusion of an individual's increases in wealth and allowing reductions only for non-personal costs that reduce wealth. This Article seeks …
Risk, Return, And Objective Economic Substance, Charlene Luke
Risk, Return, And Objective Economic Substance, Charlene Luke
Charlene Luke
The economic substance doctrine is a judicial method used to assess transactions suspected of being nothing more than elaborate (and illicit) tax avoidance. Courts vary in their formulation of the doctrine. Generally, the test consists of (1) a subjective inquiry into the taxpayer's motivations for entering the suspect transaction and (2) an objective inquiry into whether the transaction accomplished anything beyond tax effects. Both inquiries frequently revolve around the profit potential of the suspect transaction. In making an objective inquiry into profit, courts focus on the profit potential exclusive of taxes - the pre-tax landscape. This Article suggests that although …
Beating The 'Wrap': The Agency Effort To Control Wraparound Insurance Tax Shelters, Charlene Luke
Beating The 'Wrap': The Agency Effort To Control Wraparound Insurance Tax Shelters, Charlene Luke
Charlene Luke
The first wraparound insurance tax shelter was marketed in the mid-1960s as a means for contract owners to exploit the inconsistency arising from the difference in the tax treatment of investment returns earned inside variable insurance contracts and the economically similar returns available outside such contracts. Federal income tax is deferred (and in some cases eliminated) on the income accruing inside variable insurance products - called inside buildup. In the most recent iteration of the wraparound insurance gambit, insurance companies wrapped private-placement, hedge-fund interests inside variable insurance products in order to allow contract owners to defer tax on the ordinary …
Managing The Next Deluge: A Tax System Approach To Flood Insurance, Charlene Luke, Aviva Abramovsky
Managing The Next Deluge: A Tax System Approach To Flood Insurance, Charlene Luke, Aviva Abramovsky
Charlene Luke
The National Flood Insurance Program (NFIP) has fallen short in fulfilling its promise as a social safety net for flood loss victims. In place of the NFIP, this Article proposes a mandatory social insurance plan that would harness the strengths of the federal taxing authority to provide basic relief for flood losses occurring at an individual’s primary residence. Any plan for addressing flood loss must navigate hotly debated, competing views about government intervention, redistribution, private markets, environmental protection, and property rights. This Article argues that government intervention in flood loss relief is inevitable, at least in the foreseeable future, and …
Getting Physical: Excluding Injury Awards Under The New Section 104(A)(2), J. Martin Burke, Michael K. Friel
Getting Physical: Excluding Injury Awards Under The New Section 104(A)(2), J. Martin Burke, Michael K. Friel
Michael Friel
This article analyzes the 1996 amendments to section 104(a)(2) of the Internal Revenue Code. The authors argue that while section 104(a)(2) was in need of remedy, the remedy chosen is both insupportable from the standpoint of tax policy and problematic in terms of administrability. Part II of the article traces the recent history of the statute’s judicial construction. Part III discusses the provisions of the 1996 amendments. Part IV demonstrates the impact of the 1996 amendments on dignitary torts and highlights policy and interpretational problems associated with the amended provision. The article concludes with a proposal for a better remedy.
A Framework For An Informed Study Of The Realistic Role Of Tax In A Development Agenda, Yariv Brauner
A Framework For An Informed Study Of The Realistic Role Of Tax In A Development Agenda, Yariv Brauner
Yariv Brauner
This article builds on the insights of this development research to develop a new agenda for tax incentives (and equivalent tax measures), the research of their merits when used by developing countries, and their optimal design. The stated goal of these incentives is to attract foreign direct investment, and ultimately enhance economic growth and promote development. Almost all countries use such tax incentives, and business interests strongly support and even demand their use, yet, economic research in general, and the international economic organizations in particular, have been skeptical about their effectiveness." Tax incentives are not only ubiquitous, but also very …
The Non-Sense Tax: A Reply To New Corporate Income Tax Advocacy, Yariv Brauner
The Non-Sense Tax: A Reply To New Corporate Income Tax Advocacy, Yariv Brauner
Yariv Brauner
This Article challenges recent attempts by influential scholars to rationalize the existence of the corporate income tax. The corporate income tax has long been considered unjustifiable on traditional tax policy grounds. The new justifications recognize this, yet argue that the tax is still desirable because it promotes other goals, such as improvement of corporate governance and restraint of undesirable corporate management power accumulation. This Article demonstrates that the existence and magnitude of these alleged benefits of the corporate income tax are doubtful. Yet, the Article argues, even if taken as correct, the recent rationalization of the corporate income tax cannot …
Integration In An Integrating World, Yariv Brauner
Integration In An Integrating World, Yariv Brauner
Yariv Brauner
During the second half of the last century, many countries gradually replaced their so-called classical corporate tax regimes, under which corporate earnings were taxed twice -- once in the hands of the corporation, and again when distributed to corporate shareholders as dividends -- with an integrated regime (imputation), which taxed such earnings only once. The driving force behind this trend was the expectation of significant efficiency gains. This clear and gradual trend has been abruptly reversed with the turn of the century. The phenomenon we call globalization, and in particular the proliferation of cross-border business and investment, has materially contributed …
Value In The Eye Of The Beholder: The Valuation Of Intangibles For Transfer Pricing Purposes, Yariv Brauner
Value In The Eye Of The Beholder: The Valuation Of Intangibles For Transfer Pricing Purposes, Yariv Brauner
Yariv Brauner
This article assesses the desirability of our current, arms' length based, transfer pricing regime by analyzing its theoretical and practical effectiveness in application to transfers of intangibles. A detailed analysis of the practice of valuation of intangibles, which is the key component in the application of this regime, exposes its weaknesses that result in undesirable market incentives. These incentives create a strong bias in favor of large multinational enterprises, yet, even if one favored such bias, it is achieved using an uncontrollable, costly and wasteful legal mechanism. The article particularly criticizes the regime's disregard of the unique characteristics of intangibles …
An International Tax Regime In Crystallization, Yariv Brauner
An International Tax Regime In Crystallization, Yariv Brauner
Yariv Brauner
The grand illusion of a single, worldwide, tax system that will eliminate all international inefficiencies, and assist all the nations of the world to maximize their relative advantages, is, as commonly accepted, utopian. The tax, academic and professional, writing in the field of international taxation, and cross-border interaction, between tax systems and jurisdictions has grown, exponentially, in the last decade, but no significant work has been done to prove, or disprove, the naivety of this hypothesis. Some scholars and tax executives, in certain international organizations, have discussed ideas along this line, but no single organization has, seriously, attempted to promote …