Taxation-Federal Commons^™

To Praise The Amt Or To Bury It, Daniel S. Goldberg

Faculty Scholarship

The alternative minimum tax (AMT) has recently become a cause célèbre because many more taxpayers are now subject to it than originally envisioned at the time of its enactment in 1969 (and, indeed, than after any of its several modifications over the years). As such, it has been discussed and criticized in the press and by tax professionals and academics, most recently in Tax Notes by four former Internal Revenue Service commissioners who advocated scrapping it entirely. The criticism has questioned the wisdom of the inadvertent expansion of the AMT in coverage, that is, the number of taxpayers who will …

Computing Interest On Overpayments And Underpayments: How Difficult Can It Be? Very!, Mary A. Mcnulty, David H. Boucher, Joseph M. Incorvaia, Robert D. Probasco

Faculty Scholarship

Taxpayers often assume that the difficult part of a tax dispute is resolving the tax liability and penalties, while interest computation is fairly straightforward. In the authors' experience, however, interest determinations are as subject to controversy and prone to error as tax liability determinations. The Article explores some of the areas that taxpayers should review carefully in the process of finalizing interest computations.

- Frequent Errors. The Article reviews twelve areas in which, even though the law is settled and the facts are usually clear, the Service's interest computations frequently include mistakes. Taxpayers need to be aware of these provisions, …

Taxing The Promise To Pay, Brant J. Hellwig, Gregg D. Polsky

Scholarly Articles

The IRS recently disclosed that it has identified more than 100 executives at 42 leading public corporations that participated in a tax shelter designed to defer the recognition of income from the exercise of stock options. While the agency thus far has identified approximately $700 million in unreported gains from these shelters, it predicts that the revenue loss to the government will ultimately exceed $1 billion. Compared to most tax shelters, this particular transaction (commonly known as the "Executive Compensation Strategy" or "ECS") is remarkably simple. Rather than exercise the options individually, a participating executive instead transfers the options to …

Taxing Utility, Terrence Chorvat

George Mason University School of Law Working Papers Series

In order to assess the efficiency of a tax, we should examine its effect on the behavior of individuals. In general, the less a tax affects behavior, the more efficient it is thought to be. The standard example of a non-distorting tax is a lump-sum tax, which does not change with the behavior of the taxpayer. However, this article demonstrates that behavioral distortions can and do arise from a change in even a lump-sum tax. The only truly non-distortionary tax would be one based on utility itself. Utility, which has been used as a norm for distributional analysis, is also …

The Capital Gains "Sieve" And The "Farce" Of Progressivity 1921-1986, John W. Lee

Faculty Publications

No abstract provided.

Beyond The Little Dutch Boy: An Argument For Structural Change In Tax Deduction Classification, Jeffrey H. Kahn

Scholarly Publications

One of the most active disputes in tax law today is the question of the proper tax consequences for a successful plaintiff, a portion of whose taxable damage award is paid to his or her attorney pursuant to a contingent fee arrangement. At issue is whether the plaintiff is taxable on the portion of the award that is payable to the attorney. One aspect of this problem was resolved prospectively by the adoption of the American Jobs Creation Act of 2004, but the problem continues to exist in other areas. The United States Supreme Court resolved a split in the …

All Of A Piece Throughout: The Four Ages Of U.S. International Taxation, Reuven S. Avi-Yonah

Articles

This paper divides up the history of U.S. international taxation into four periods, on the basis of what was the basic theoretical principle underlying the major legislative enactments made in each period. The first period lasted from the adoption of the Foreign Tax Credit in 1918 to the end of the Eisenhower Administration, and was dominated by the concept of the right to tax as flowing from benefits conferred by the taxing state. The second period lasted from 1960 until the end of the Carter Administration, and was dominated by the concept of capital export neutrality and an emphasis on …

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

Scholarly Works

No abstract provided.

Recent Developments In Federal Income Taxation: The Year 2004, Ira B. Shepard, Martin J. Mcmahon Jr.

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 2004 - 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. Amendments to the Internal Revenue Code generally are not discussed except to …

Addressing Imperfections In The Tax System: Procedural Or Substantive Reform?, Leandra Lederman, Stephen W. Mazza

Articles by Maurer Faculty

In his book "Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich - and Cheat Everybody Else", David Cay Johnston, the Pulitzer Prize-winning reporter for the New York Times, covers a wide array of topics, including some that are quite complex, in a very readable way. The federal income tax system generally and tax compliance in particular are important focuses of the book, but the theme that implicitly connects chapters that otherwise appear unrelated is a variety of aspects of income inequality.

Although "Perfectly Legal" does not make a clear case that politicians and …

President Bush's Personal Retirement Accounts: Saving Or Dismantling Social Security, Kathryn L. Moore

Law Faculty Scholarly Articles

President Bush has long been a proponent of investing a portion of payroll taxes in the private sector. For example, in 1999, then-Governor George Bush said to free-market crusader Stephen Moore, "I just want you to know ... that I'm really committed to these private investment accounts." In 2001, President Bush directed a 16-member bipartisan commission, the President's Commission to Strengthen Social Security, to formulate a plan for Social Security reform that included voluntary personal retirement accounts. But it was not until the beginning of his second term in office that President Bush began in earnest his crusade to fundamentally …

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

Faculty Scholarship

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 …

Low-Income Taxpayers And The Modernized Irs: A View From The Trenches, Nancy Abramowitz, Janet Spragens

Articles in Law Reviews & Other Academic Journals

This article examines the continuing effects on low-income taxpayers of the 1998 Internal Revenue Service reorganization and computer modernization of the agency. Specifically, the article highlights the severe hardships that have been experienced by that segment of the taxpayer population resulting from agency efforts to streamline resolution of postfiling disputes. Those efforts include acceleration of the administrative process, centralization of agency function, elimination of local contracts, and increasing reliance on computer-generated correspondence. The authors believe that the net result for many taxpayers has been the trading of fairness for administrative efficiency and the contraction - and often denial - of …