Taxation-Federal Commons^™

The Inappropriateness Of The Bad Checks Penalty, Jeffrey H. Kahn, Douglas A. Kahn

Scholarly Publications

In this article, the authors argue that the penalty for sending a bad check to the IRS is excessive and that the reasonable cause exception should apply to any honest factual error.

Designing A Legal Regime To Capture Capital Gains Tax On Indirect Transfers Of Mineral And Petroleum Rights: A Practical Guide, Perrine Toledano, John Bush, Jacky Mandelbaum

Columbia Center on Sustainable Investment Staff Publications

When a local asset (or a right relating to such asset) is sold, a country will generally have jurisdiction to levy a capital gains tax on the sale, both under domestic law and international treaty. This is called taxation of a “direct” transfer of a local asset. However, taxation becomes increasingly complicated when a company located offshore owns the local asset. Further difficulties arise when the local asset is held by a chain of corporations located in tax havens. An “indirect” transfer occurs when the shares of the domestic subsidiary, the shares of the foreign company with a branch in …

Open Source: The Enewsletter Of Rwu Law 09-22-2017, Roger Williams University School Of Law

Life of the Law School (1993- )

No abstract provided.

Elaine Gagliardi On Uncertain Times: Anticipating Change And Reacting To Recent Wealth Transfer Tax Developments, Elaine H. Gagliardi

Faculty Journal Articles & Other Writings

Looming on the horizon is the very real possibility of estate tax repeal. In the interim for those clients needing to immediately make estate planning decisions, the question becomes what planning strategies best meet client needs in the face of an uncertain estate tax. Acknowledging that the ultimate answer depends on individual circumstances and goals, some common planning strategies nevertheless emerge as better options than others to address particular client goals, especially those of married couples. These planning strategies work well now and can be adapted to work well under the most likely Congressional response to repeal. Republicans have alluded …

The Negative Capital Account Maze, Walter D. Schwidetzky

All Faculty Scholarship

Outside Hubert I and Hubert II, there has been little discussion of negative capital accounts in the tax context and almost no discussion in the nontax context. Nontax law, however, is critically important. This report provides an integrated discussion of the application of tax and nontax law to negative capital accounts.

One of the challenges in writing this report is that it requires a discussion of both the at-risk rules of section 465 and the debt allocation rules of section 752. Complex issues involving sections 465 and 752 and their interaction are worthy of their own articles. Indeed, others have …

Partnership Tax Allocations: The Basics, Walter D. Schwidetzky

All Faculty Scholarship

This article endeavors to help practitioners who are not partnership tax allocation experts identify when they should consult with those with that expertise. The partnership-allocation Treasury Regulations have been called "a creation of prodigious complexity ... essentially impenetrable to all but those with the time, talent, and determination to become thoroughly prepared experts on the subject." This article is written for those, to date at least, without that time and determination. At the same time, the article provides an introduction to the partnership tax allocation rules for those contemplating making the requisite investment of time and determination.

The term "partnership," …

Taxation, Competitiveness, And Inversions: A Response To Kleinbard, Michael S. Knoll

All Faculty Scholarship

In this report, I argue that the inversion situation is more nuanced, complex, and ambiguous than Edward D. Kleinbard acknowledges, and I challenge Kleinbard’s claim that U.S. multinationals are on a tax par with their foreign competitors.

The Gordian Knot: How The United States, The European Union, And Organization For Economic Cooperation And Development Took Action Against Corporate Tax Avoidance, Katlyn Twomey

Honors Projects in History and Social Sciences

In 2016, the United States had the highest corporate tax rate in the world. Perhaps, the high tax rate could be why American corporations are holding an estimated $2.5 trillion abroad (Cox 2016). According to a study by the Bureau of Economic Analysis, U.S. firms pay a measly 3% in tax to foreign governments on those profits, rather than the 35% U.S. corporate tax rate. How are these corporations able to legally avoid paying taxes on a large percentage of their profits? Many use various loopholes in the laws to shift profits into other countries or U.S. states referred to …

Problems With Destination-Based Corporate Taxes And The Ryan Blueprint, Reuven S. Avi-Yonah, Kimberly Clausing

Articles

With the election of Donald Trump and the Republican Party’s domination of Congress, House Speaker Paul Ryan’s blueprint for fundamental tax reform requires more careful analysis. The Ryan blueprint combines reduced individual rates with a destination-based cash flow type business tax applicable to all businesses. The destination-based business tax at the center of the blueprint has several major problems: It is incompatible with our WTO obligations, it is incompatible with our tax treaties, and it will not eliminate the problems of income shifting and inversions it is designed to address. In addition, these proposals generate vexing technical problems that are …

Carbon Tax Rising, Shi-Ling Hsu

Scholarly Publications

No abstract provided.

Postpartum Taxation And The Squeezed Out Mom, Shannon Weeks Mccormack

Articles

Faced with too-short (or nonexistent) maternity leaves, inflexible work schedules, and the soaring costs of childcare in the United States, many new mothers temporarily leave the workforce to care for their young children. Although media attention has focused on the “opt-out” mom, many more mothers are squeezed out of the external workplace. But mothers that try to return to work may discover that it is difficult to do so, as employers have been shown to be less likely to hire mothers than others. A mother that does reenter may find that even short periods out of work cost (sometimes far) …

The Fallacious Objections To The Tax Treatment Of Carried Interests, Jeffrey H. Kahn, Douglas A. Kahn

Scholarly Publications

No abstract provided.

The Expatriation Tax, Deferrals, Mark To Market, The Macomber Conundrum And Doubtful Constitutionality, Henry M. Ordower

All Faculty Scholarship

Taxpayers shift income offshore with lawful devices like operating through a foreign corporation. Taxpayers have enhanced the amount of that income lodged outside the U.S. with transfer pricing strategies. Andtaxpayers have evaded U.S. taxation of their worldwide income by secreting assets and income in tax haven, bank secrecy jurisdictions. Statutes, regulations and litigation seek to limit use of offshore opportunities toavoid the U.S. income tax. Penalties for taxpayers and their foreign hosts have been enacted to prevent thehiding of assets offshore. This article reviews many of those techniques and statutory or regulatory responses in the context of examining the 2008 …

A Consumer Protection Rationale For Regulation Of Tax Return Preparers, Pippa Browde

Faculty Law Review Articles

Of the 150 million tax returns filed each year, approximately fifty-six percent are prepared with the help ofa paid preparer. Although state-licensed lawyers and certified public accountants may prepare tax returns for clients, the vast majority ofpaid tax return preparers are completely unregulated. For low-income taxpayers who are eligible for refundable tax credits, these unregulated tax return preparers do more than just fill out tax returns. Return preparers who serve low-income taxpayers often also market consumer credit products, such as refund anticipation loans or checks. Government agencies and consumer advocates have documented widespread problems with the tax return preparer industry. …

(Anti)Poverty Measures Exposed, Francine J. Lipman

Scholarly Works

Few economic indicators have more salience and pervasive financial impact on everyday lives in the United States than poverty measures. Nevertheless, policymakers, researchers, advocates, and legislators generally do not understand the details of poverty measure mechanics. These detailed mechanics shape and reshape poverty measures and the too often uninformed responses and remedies. This Article will build a bridge from personal portraits of families living in poverty to the resource allocations that failed them by exposing the specific detailed mechanics underlying the Census Bureau’s official (OPM) and supplemental poverty measures (SPM). Too often, when we confront the problem of poverty, the …

Tax Treatment Of A Marijuana Business, Douglas A. Kahn, Howard Bromberg

Articles

Currently, twenty-eight states and the District of Columbia allow the use of marijuana for medical purposes and permit the conduct of a business marketing of marijuana for that purpose. Eight of those states and the District of Columbia permit the recreational use of marijuana. There is reason to believe that more states will decriminalize the marketing of marijuana. However, marijuana is listed in Schedule 1 of the federal Controlled Substances Act of 1970 (CSA) which makes it illegal under federal law to manufacture or distribute marijuana even when it is legal to do so under local state law. In a …

Considering "Citizenship Taxation": In Defense Of Fatca, Young Ran Kim

Utah Law Faculty Scholarship

Inspired by Ruth Mason’s recent article, Citizenship Taxation, which reaches a general conclusion against citizenship taxation, this Article also questions citizen taxation under the same normative framework, but with a particular focus on efficiency and administrability, and takes a much less critical stance towards the merits of citizenship taxation. First, neither citizenship taxation nor residence-based taxation can completely account for the differences between residents’ and nonresidents’ ability to pay taxes under the fairness argument. Second, the efficiency argument, that citizenship taxation may distort both Americans’ and non-Americans’ citizenship decisions, is not convincing. The American citizenship renunciation rate is not particularly …

Donor Advised Funds: Charitable Spending Vehicles For 21st Century Philanthropy, Roger Colinvaux

Scholarly Articles

The donor advised fund (DAF) is changing longstanding giving norms in United States philanthropy. DAF contributions now account for around 8.4% of giving by individuals in the U.S. Over half of those contributions go to national DAF sponsors that have relationships with large commercial investment firms like Fidelity, Vanguard, and Schwab. This Article seeks to advance the understanding of the donor advised fund and to address two of the main policy questions: whether to require a mandatory distribution of funds by DAFs and their sponsoring organizations and how to respond to the increased use of DAFs for noncash charitable contributions. …

The Great Etf Tax Swindle: The Taxation Of In-Kind Redemptions, Jeffrey M. Colon

Faculty Scholarship

Since the repeal of the General Utilities doctrine over 30 years ago, corporations must recognize gain when distributing appreciated property to their shareholders. Regulated investment companies (RICs), which generally must be organized as domestic corporations, are exempt from this rule when distributing property in kind to a redeeming shareholder.

In-kind redemptions, while rare for mutual funds, are a fundamental feature of exchange-traded funds (ETFs). Because fund managers decide which securities to distribute, they distribute assets with unrealized gains and thereby significantly reduce the future tax burdens of their current and future shareholders. Many ETFs have morphed into investment vehicles that …

Simplexity: Plain Language And The Tax Law, Joshua D. Blank, Leigh Osofsky

Articles

In recent years, federal government agencies have increasingly attempted to use plain language in written communications with the public. The Plain Writing Act of 2010, for instance, requires agencies to incorporate "clear and simple" explanations of rules and regulations into their official publications. In the tax context, as part of its "customer service" mission, the Internal Revenue Service bears a "duty to explain" the tax law to hundreds of millions of taxpayers who file tax returns each year. Proponents of the plain language movement have heralded this form of communication as leading to simplicity in tax compliance, more equitable access …

Inequality And The Mortgage Interest Deduction, Kyle Rozema, Daniel J. Hemel

Scholarship@WashULaw

The mortgage interest deduction is often criticized for contributing to after-tax income inequality. Yet the effects of the mortgage interest deduction on income inequality are more nuanced than the conventional wisdom would suggest. We show that the mortgage interest deduction causes high-income households (i.e., those in the top 10% and top 1%) to bear a larger share of the total tax burden than they would if the deduction were repealed. We further show that the effect of the mortgage interest deduction on income inequality is highly sensitive to the alternative scenario against which the deduction is evaluated. These findings demonstrate …

Achieving American Retirement Prosperity By Changing Americans' Thinking About Retirement, Peter H. Huang

Publications

There are many decisions that Americans have to make about retirement before, at, and after retirement. For example, Americans have to decide when to start saving for retirement, how much to save, how to invest those savings, when to retire, when to claim social security, and how to take required minimum distributions from 401(k) plans or Individual Retirement Accounts. Different things can go wrong at each of these decisions for different reasons. Many Americans, for various reasons, including insufficient energy, money, motivation, time, and understanding, do no retirement planning. Some Americans do some retirement planning, yet worry they are doing …

Introduction To Feminist Judgments: Rewritten Tax Opinions, Anthony C. Infanti, Bridget J. Crawford

Book Chapters

Could a feminist perspective change the shape of the tax law? Most people understand that feminist reasoning has tremendous potential to affect, for example, the law of employment discrimination, sexual harassment, and reproductive rights. Few people may be aware, however, that feminist analysis can likewise transform tax law (as well as other statutory or code-based areas of the law). By highlighting the importance of perspective, background, and preconceptions on the reading and interpretation of statutes, Feminist Judgments: Rewritten Tax Opinions shows what a difference feminist analysis can make to statutory interpretation. This volume, part of the Feminist Judgments Series, brings …

Taxing Social Impact Bonds, Orly Mazur

Faculty Journal Articles and Book Chapters

An exciting new way to fund social services has recently emerged. This new financing mechanism, called a social impact bond (SIB), has the potential to help us tackle some of our nation’s most challenging social problems. Broadly speaking, a SIB is a type of “pay for success” contract where private investors provide the upfront capital to finance a social program, but only recoup their investment and realize returns if the program is successful. Like any new financing instrument, SIBs create numerous regulatory challenges that have not yet been addressed. One unresolved issue is the tax implications of a SIB investment. …

Pre-Enforcement Litigation Needed For Taxing Procedures, Stephanie Mcmahon

Faculty Articles and Other Publications

Courts have opened tax guidance to procedural attack. Consequently, taxpayers who are found to owe tax may challenge the validity of the guidance implementing the tax if the procedure used by the Treasury Department in adopting the guidance failed to comply with the Administrative Procedure Act, in particular, with notice-and-comment. This increased willingness to consider tax guidance's procedural defects offers little to most taxpayers unless they are also given a better means to raise procedural challenges. Under current law and in most circumstances, generally, taxpayers can bring a challenge only after they have been found to owe taxes in an …

Heading Off A Cliff? The Tax Reform Man Cometh, And Goeth, Michael J. Graetz

Faculty Scholarship

The major tax policy challenge of the 21st century is the need to address the nation’s fiscal condition fairly and in a manner conducive to economic growth. But since California adopted Proposition 13 nearly forty years ago, antipathy to taxes has served as the glue that has held the Republican coalition together. Even though our taxes as a percentage of our economy are low by OECD standards and low by our own historical experience, anti-tax attitudes have become even more important for Republicans politically, since they now find it hard to agree on almost anything else. So revenue-positive, or even …