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Full-Text Articles in Tax Law

Tax Shelter Disclosure And Penalties: New Requirements, New Exposures, Mary A. Mcnulty, Robert D. Probasco Aug 2018

Tax Shelter Disclosure And Penalties: New Requirements, New Exposures, Mary A. Mcnulty, Robert D. Probasco

Robert Probasco

One of the primary weapons in the battle against tax shelters has been mandatory disclosure to the IRS. The American Jobs Creation Act of 2004 built on this approach by clarifying and making consistent the various disclosure requirements and strengthening penalties for non-disclosure. To uncover abusive transactions, Congress drew the boundaries of disclosure so broadly that even legitimate tax planning transactions are covered. To understand the dangers in the new rules, one must look at the broad range of transactions covered, the participants covered, and the harsh penalties for nondisclosure.

- Transactions Covered. The disclosure requirements apply to six categories …


Much Uncertainty About Uncertain Tax Positions, Robert D. Probasco Aug 2018

Much Uncertainty About Uncertain Tax Positions, Robert D. Probasco

Robert Probasco

The Internal Revenue Service (IRS) announced in January 2010 a new initiative to require certain businesses to report “uncertain tax positions” on a new schedule filed with their annual tax returns. Draft schedules and instructions issued in April 2010 clarified some of the mechanical aspects of the new requirement but left many open issues and questions. The IRS proposal built on requirements by the Financial Accounting Standards Board (FASB) in FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“FIN 48”). The standard requires companies, in their financial statements, to reserve some of the benefits from any position taken …


Navigating Tefra Partnership Audits In Multi-Tiered Entity Structures, Mary A. Mcnulty, Robert D. Probasco, Lee S. Meyercord Aug 2018

Navigating Tefra Partnership Audits In Multi-Tiered Entity Structures, Mary A. Mcnulty, Robert D. Probasco, Lee S. Meyercord

Robert Probasco

The Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) established a unified procedure for determining the tax treatment of partnership items at the partnership level rather than the partner level. Although these rules addressed a serious and real administrative problem in the assessment of partnership level deficiencies, they also created a complex process with many new problems and potential traps. One particularly unique set of challenges arises in the context of multi-tiered entities.

Multi-tiered entities are partnerships that have a partnership or other pass-through entity as a partner. The pass-through partner is commonly referred to as a “tier,” and …


Reworking The Revolution: Treasury Rulemaking & Administrative Law, David Berke May 2018

Reworking The Revolution: Treasury Rulemaking & Administrative Law, David Berke

Michigan Journal of Environmental & Administrative Law

How administrative law applies to tax rulemaking is an open and contested question. The resolution of this question has high stakes for the U.S. tax system. The paradigm is shifting away from so-called “tax exceptionalism”—where Treasury action is considered effectively exempt from the Administrative Procedure Act (the “APA”) and related administrative law doctrines. This paradigm-shift is salutary. However, currently prevailing anti-exceptionalist theory—an administrative framework for tax that is rapidly gaining credence within both the federal judiciary and the legal academy—threatens to destabilize the U.S. tax system. This formalistic approach to administrative law in tax rulemaking has the potential to invalidate …