Taxation-Federal Commons^™

Written Testimony Of Philip Hackney For The Hearing On Growth Of The Tax-Exempt Sector And The Impact On The American Political Landscape (U.S. House Ways & Means Subcommittee On Oversight, December 13, 2023), Philip Hackney

Testimony

In written testimony before the House Ways & Means Subcommittee on Oversight on December 13, 2023, Professor Hackney emphasized three points about tax-exempt organizations and politics: (1) a diverse nonprofit sector that fosters civic participation and engagement is a gem of the United States -- we should maintain that; (2) the IRS budget for Exempt Organizations continues to NOT be sufficient to ensure the laws are equally and fairly enforced; and (3) there are simple things the IRS could do to enforce the law that it is not doing.

Brief Of Amicus Curiae Tax Professors In Support Of Respondent In Moore V. United States, Donald B. Tobin, Ellen P. Aprill

Faculty Scholarship

Petitioners in Moore v. United States have argued to the Supreme Court that the word “incomes” in the Sixteenth Amendment authorizes only the taxation of “realized” income. Thus, they assert, a repatriation tax (referred to as MRT) in the Tax Cuts and Jobs Act is invalid because it taxes unrealized gains. While other briefs in the case explain that, as properly understood, the tax at issue taxes only realized gains, this brief counters the petitioners’ Sixteenth Amendment argument. It explains that economists, accountants, and lawyers in the early twentieth century all defined income in broad terms, embracing the definition of …

Deeper Into The Knight: Exploring Deans Knight And Its Effects On The Canadian Gaar, Jinyan Li, Marshall Rothstein, Steve Suarez, Jeffrey Trossman

Articles & Book Chapters

This article discusses the most recent decision of the Supreme Court of Canada in Deans Knight Income Corporation v. Canada (2023) and explores its implications for the Canadian GAAR.

Tax Reporting As Regulation Of Digital Financial Markets, Young Ran (Christine) Kim

Faculty Articles

FTX’s recent collapse highlights the overall instability that blockchain assets and digital financial markets face. While the use of blockchain technology and crypto assets is widely prevalent, the associated market is still largely unregulated, and the future of digital asset regulation is also unclear. The lack of clarity and regulation has led to public distrust and has called for more dedicated regulation of digital assets. Among those regulatory efforts, tax policy plays an important role. This Essay introduces comprehensive regulatory frameworks for blockchain-based assets that have been introduced globally and domestically, and it shows that tax reporting is the key …

Brief Of The Petitioners-Taxpayers Edward A. And Doris Zelinsky, Edward A. Zelinsky

Faculty Amicus Briefs

As a matter of state law, New York’s own regulations and case law do not permit taxation of Professor Zelinsky’s income earned at home in Connecticut for the COVID-19 period starting on March 15, 2020. Even if New York law permitted the taxation of Professor Zelinsky’s Cardozo salary during this COVID-19 period, as a matter of federal constitutional law, the Due Process and dormant Commerce Clauses do not permit New York’s taxation of this salary earned in Connecticut. In addition, Zelinsky v. Tax Appeals Tribunal, 1 N.Y. 3d 85 (2003), cert. denied, 541 U.S. 1009 (2004), does not apply to …

Interlinking Between Income Tax, Citizenship And Democracy? A Case Study Of Canada And China, Jinyan Li

Conference Papers

The interlink between taxation, citizenship and democracy appears to be obvious in Western democracies: citizens are voters, taxpayers and beneficiaries of public spending funded by tax revenues. The literature on the politics of taxation suggests that democratic institutions affect taxation at every stage of the policy-making process, the type of elections and governance model influence the level of redistribution and complexity of the tax system, democracies generally choose policies that are more favorable to the poor than non-democracies, the tax mix varies with the nature of the political regime, and more repressive governments rely less on personal income taxation. Political …

Whirlpool’S Subpart F Position Was Inconsistent With Congressional Intent, Jeffery M. Kadet

Articles

I believe that Whirlpool took an untenable position on allocation in its 2009 tax filings. The Tax Court in its Whirlpool decision corrected this position using a reasonable approach that used the taxpayer’s own accounting. Now, in their article, Yoder et al. have labeled the Tax Court’s approach a “fundamental flaw” while championing Whirlpool’s position. Considering this situation, it is critical that Treasury and the IRS add appropriate guidance to reg. section 1.954-3. This would clarify that in the case of sales to related or unrelated persons, with no locally based sales personnel and where group personnel in other locations …

Crypto Assets And The Problem Of Tax Classifications, Eric D. Chason

Faculty Publications

To date, Internal Revenue Service (I.R.S.) guidance on cryptocurrencies has been thin. When the I.R.S. has issued guidance, it occasionally mishandles the technical details (such as confusing air drops and hard forks). More personnel (and personnel with greater technical expertise) would allow the I.R.S. to keep pace with the explosive growth of cryptocurrency. Nevertheless, the I.R.S. could better leverage its existing resources by focusing on select issues and seeking enabling legislation from Congress. Specifically, the I.R.S. should focus on crypto issues occurring on a system-wide basis and not requiring taxpayer-specific considerations.

For example, determining whether Bitcoin is a “security” under …

Volunteer Income Tax Assistance Available To Local Community Members Through March 28, James Owsley Boyd

Keep Up With the Latest News from the Law School (blog)

With tax season now in full-swing through April 18, a dedicated group of volunteers is making the filing process easier—and cheaper—for many local community members. Local taxpayers with an annual income under $57,000 are eligible for free tax preparation help from students at the Indiana University Maurer School of Law’s Volunteer Income Tax Assistance site on Monday and Tuesday evenings from 6 to 9 p.m. beginning January 30.

The Future Of The Corporate Form In Income Tax: A Case Study Of Canada, Jinyan Li

All Papers

A corporation is nothing but a piece of paper. And yet, this piece of paper enjoys the status of a person and has an independent identity as a taxpayer (the “separate entity principle”). It can generate tremendous value for its shareholders through tax savings resulted from tax deferral, tax shifting, and tax subsidies. Why does tax law allow such value to exist? Is there any hard line constraining the scope of the tax benefits associated with the corporate form? To what extent can the two pillars (Pillar One and Pillar Two) crush the corporate form? What is the future of …

Reimagining A U.S. Corporate Tax Increase As A Supplemental Subtraction Vat, Daniel S. Goldberg

Faculty Scholarship

The U.S. federal government raises tax revenue almost exclusively through income taxes, both corporate and individual, whereas its trading partners and competitors rely for their national revenue on both income taxes and “destination-based” value added taxes (VATs), which are not imposed on exports but are imposed on imports. As a result, U.S. corporations, which are subject to U.S. corporate income tax, may be at a serious trade disadvantage to competitor non-U.S. corporations with respect to both U.S. domestic sales and foreign sales, if the U.S. corporate income tax exceeds the foreign country’s income tax imposed on those competitors.

The Biden …

Public Good Through Charter Schools?, Philip Hackney

Articles

Should nonprofit charter schools be considered “charitable” under § 501(c)(3) of the Internal Revenue Code and be entitled to the benefits that go with that designation (income tax exemption, charitable contribution deduction, etc.)? Current tax law treats them as such; the question is whether there is a good rationale for this treatment. In addition to efficiency and equity, I consider political justice as a value in evaluating tax policy. By political justice, I mean a democratic system that prioritizes the opportunity for more people to have a voice in collective decisions (political voice equality or PVE). Thus, a tax policy …

Context, Purpose, And Coordination In Taxation, Blaine G. Saito

Connecticut Law Review

A great deal of scholarship focuses on whether we should place social safety net and redistribution programs within the tax sphere and under the responsibility of the IRS. But much of this literature misses a key point. These programs are here, and they are unlikely to leave the tax sphere. But little is said about how to approach administering them.

This Article suggests the IRS administer these programs under a new framework called contextualized purpose. The idea is that these tax programs should be organized and managed in a way that comports with the broader context of the social safety …

Yesterday's Protester May Be Tomorrow's Saint: Reimagining The Tax System Through The Work Of Dorothy Day, Bridget J. Crawford, W. Edward Afield

Elisabeth Haub School of Law Faculty Publications

This Article offers a critical exploration of Day's views on the relationship between the tax system and Catholic social theory. Part I of this Article provides a biographical sketch of Dorothy Day and an overview of the Catholic Worker movement. Part II explores Day's views on taxation, pacifism, and social justice. It attempts to reconcile her belief in wealth redistribution with her nonpayment of federal income taxes and her failure to seek tax-exempt status for the Catholic Worker. Part III examines Day's tax resistance in the context of Catholic social teaching, particularly as that thought was developing during Day's lifetime …

A More Capacious Concept Of Church, Philip Hackney, Samuel D. Brunson

Articles

United States tax law provides churches with extra benefits and robust protection from IRS enforcement actions. Churches and religious organizations are automatically exempt from the income tax without needing to apply to be so recognized and without needing to file a tax return. Beyond that, churches are protected from audit by stringent procedures. There are good reasons to consider providing a distance between church and state, including the state tax authority. In many instances, Congress granted churches preferential tax treatment to try to avoid excess entanglement between church and state, though that preferential treatment often just shifts the locus of …

Strings Are Attached: Revealing The Hidden Subsidy For Perpetual Donor Limits On Gifts, Roger Colinvaux

Scholarly Articles

Charitable gifts often come with strings attached. Donors limit their gifts in many ways, by restricting an asset’s use or purpose, controlling the timing of spending (as in an endowment), securing naming rights, or by retaining effective control over the distribution or investment of the asset by giving to a charitable intermediary such as a donor advised fund or private foundation. Most donor limits are perpetual in nature and a form of dead hand control. The Article explains that default rules strongly favor donor limits. Property law allows donors wide latitude to place limits on gifts, and they are easy …

Unbundling Social Security From The Payroll Tax, Henry Ordower

All Faculty Scholarship

To preserve social security as a welfare program primarily for older individuals and to ameliorate the distributional inequity of funding social security across income and wealth levels, this article recommends unbundling the benefit side of social security from its longstanding payroll tax funding mechanism. The article recommends replacing the payroll tax revenue with a budget allocation from general revenues accompanied by both revenue raisers and benefit limitations. Income tax rate increases linked to repeal of the FICA tax and tax expenditure limitations would enhance income tax revenue. Modifying social security benefits from their current overinclusive, entitlement structure for all to …