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Gain From The Sale Of An Income Interest In A Trust, Douglas A. Kahn 2010 University of Michigan Law School

Gain From The Sale Of An Income Interest In A Trust, Douglas A. Kahn

Articles

A tax doctrine that is related to the anticipatory assignment of income doctrine, but yet different from that doctrine is variously referred to as the "substitute for ordinary income doctrine" or the "anticipation of income doctrine." This latter doctrine arises on the sale of an item. The test often utilized to determine whether that latter doctrine applies is whether the sale of an item substantively represents the receipt of a substitute for future income - i.e., are the proceeds of the sale given "in lieu of" ordinary income that the seller would have otherwise received at a later date. The ...


Taxed Structured Settlements, Gregg D. Polsky, Brant J. Hellwig 2010 University of South Carolina - Columbia

Taxed Structured Settlements, Gregg D. Polsky, Brant J. Hellwig

Boston College Law Review

Congress has granted a tax subsidy to physically injured tort plaintiffs who enter into structured settlements. The subsidy allows these plaintiffs to exempt the investment yield imbedded within the structured settlement from federal income taxation. The apparent purpose of the subsidy is to encourage physically injured plaintiffs to invest, rather than presently consume, their litigation recoveries. Although the statutory subsidy by its terms is available only to physically injured tort plaintiffs, a growing structured settlement industry now contends that the same tax benefit of yield exemption is available to plaintiffs’ lawyers and nonphysically injured tort plaintiffs under general, common-law tax ...


Recent Developments In Federal Income Taxation: The Year 2009, Martin J. McMahon Jr., Ira B. Shepard, Daniel L. Simmons 2010 University of Florida Levin College of Law

Recent Developments In Federal Income Taxation: The Year 2009, Martin J. Mcmahon Jr., Ira B. Shepard, Daniel L. Simmons

UF Law Faculty Publications

This article 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 2008 – and sometimes a little farther back in time if the authors 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 discussed to the extent that (1 ...


Executive Compensation And Tax Neutrality: Taxing The Investment Component Of Deferred Compensation, Eric D. Chason 2010 William & Mary Law School

Executive Compensation And Tax Neutrality: Taxing The Investment Component Of Deferred Compensation, Eric D. Chason

Faculty Publications

No abstract provided.


Critique Of U.S. House Bill 2454 On Climate Change, Michael J. Waggoner 2010 University of Colorado Law School

Critique Of U.S. House Bill 2454 On Climate Change, Michael J. Waggoner

Articles

The U.S. House of Representatives, in June 2009, approved a bill to create a cap and trade system and a system of regulations and subsidies to address the problems of climate change. The U.S. Senate is now considering remedies for climate change. The approach of House Bill 2454 is ill-advised, and should be rejected by the Senate, because of the problems outlined below. I propose that these problems that would not be presented by a carbon tax, a simpler and more effective remedy for the risk of climate change.


An Arm's Length Solution To The Shareholder Loan Tax Puzzle, Wayne M. Gazur 2010 University of Colorado Law School

An Arm's Length Solution To The Shareholder Loan Tax Puzzle, Wayne M. Gazur

Articles

No abstract provided.


Rethinking Tax Priorities: Marriage Neutrality, Children, And Contemporary Families, James M. Puckett 2010 Penn State Law

Rethinking Tax Priorities: Marriage Neutrality, Children, And Contemporary Families, James M. Puckett

Journal Articles

Tax scholarship has long struggled with whether married taxpayers should be taxed differently from unmarried taxpayers. Currently, married taxpayers are subject to different tax rates than unmarried taxpayers, and may file a joint tax return. A married couple may pay a higher or lower amount of tax than an unmarried couple with the same total income, and a single person generally pays more tax on a given income than a married couple with a single earner with the same income. These outcomes are difficult to reconcile with a commitment to income tax progressivity, which in theory requires that higher incomes ...


American Economic Development, Managerial Corporate Capitalism, And The Institutional Foundations Of The Modern Income Tax, Ajay K. Mehrotra 2010 Indiana University Maurer School of Law

American Economic Development, Managerial Corporate Capitalism, And The Institutional Foundations Of The Modern Income Tax, Ajay K. Mehrotra

Articles by Maurer Faculty

Histories of the modern American income tax have generally focused on the role that social and political forces have played in the development of a new tax system. This article seeks to move beyond the social and political determinants to examine the economic factors that facilitated the adoption of the modern, graduated income tax. Without marginalizing the importance of social and political factors, the central aim of this article is to make a modest contribution to the legal and political historiography of the U.S. income tax by highlighting how changing material economic conditions afforded social groups, political reformers, and ...


The Price Of Conflict: War, Taxes, And The Politics Of Fiscal Citizenship, Ajay K. Mehrotra 2010 Indiana University Maurer School of Law

The Price Of Conflict: War, Taxes, And The Politics Of Fiscal Citizenship, Ajay K. Mehrotra

Articles by Maurer Faculty

Since 2003 American political leaders and lawmakers have been committed to the simultaneous pursuit of tax cuts and military excursions abroad. Just a few decades ago, when military hawks were also deficit hawks, such a position would have seemed incongruous. This essay reviews, War and Taxes, a provocative and fascinating new book that seeks to explain the apparent dissonance of recent American wartime tax policy. In contrast to conventional wisdom which presumes that wartime patriotism has always and everywhere trumped self-interest, War and Taxes shows that the history of U.S. wartime taxation is not quite such a heroic tale ...


Reducing Information Gaps To Reduce The Tax Gap: When Is Information Reporting Warranted?, Leandra Lederman 2010 Indiana University Maurer School of Law

Reducing Information Gaps To Reduce The Tax Gap: When Is Information Reporting Warranted?, Leandra Lederman

Articles by Maurer Faculty

A core problem for enforcement of tax laws is asymmetric information. The taxpayer knows the facts regarding the relevant transactions it engages in during the year-or at least has ready access to that information. The government is forced to play catch-up, obtaining that information either from the taxpayer or from third parties. Information reporting is routinely used to address this information gap. The government obtains information about the taxpayer's tax situation from a third party and-equally important-the taxpayer knows that the government has received that information. This fosters taxpayer honesty. Information reporting is not a panacea, however. It imposes ...


W(H)Ither Economic Substance?, Leandra Lederman 2010 Indiana University Maurer School of Law

W(H)Ither Economic Substance?, Leandra Lederman

Articles by Maurer Faculty

Transactions that claim inappropriate tax benefits are a perennial problem. When the IRS claims a transaction is abusive, courts generally examine whether the taxpayer had a business purpose and whether the transaction had economic substance (essentially a prospect of profit before taxes). This two-pronged "economic substance doctrine" developed from a series of Supreme Court cases.

Unfortunately, the economic substance doctrine provides a poor proxy for the real question, which was the focus of the early cases-whether the claimed tax results are consistent with Congress's intent. One important drawback of the shift from a focus on congressional intent to a ...


Murphy V. Internal Revenue Service, The Meaning Of 'Income,' And Sky-Is-Falling Tax Commentary, Erik M. Jensen 2010 Case Western Reserve University School of Law

Murphy V. Internal Revenue Service, The Meaning Of 'Income,' And Sky-Is-Falling Tax Commentary, Erik M. Jensen

Faculty Publications

This article examines the widely noted D.C. Circuit case, Murphy v. Internal Revenue Service, where a panel twice got itself hopelessly entangled in the relationship between the meaning of “income” in the Internal Revenue Code and its meaning in the Sixteenth Amendment. At issue was whether a whistle-blower's recovery for emotional distress could be reached by the income tax. The first time around, the panel concluded that the recovery could not be taxed constitutionally because it was not income. The second time, apparently after having visited another planet, the very same panel concluded that the recovery could be ...


Of Punitive Damages, Tax Deductions, And Tax-Aware Juries: A Response To Polsky And Markel, Lawrence A. Zelenak 2010 Duke Law School

Of Punitive Damages, Tax Deductions, And Tax-Aware Juries: A Response To Polsky And Markel, Lawrence A. Zelenak

Faculty Scholarship

In “Taxing Punitive Damages,” Gregg D. Polsky and Dan Markel argue that defendants paying punitive damages are under-punished relative to juries’ intentions, because tax-unaware juries do not take into account the fact that the deductibility of punitive damages significantly reduces defendants’ after-tax costs. They note that the Obama administration has proposed addressing the under-punishment problem by amending the Internal Revenue Code to disallow deductions for punitive damages (and for settlements paid on account of punitive damage claims). They conclude, however, that the proposal would be ineffective because defendants could avoid its impact by disguising nondeductible punitive damage settlements as deductible ...


Complex Tax Legislation In The Turbotax Era, Lawrence A. Zelenak 2010 Duke Law School

Complex Tax Legislation In The Turbotax Era, Lawrence A. Zelenak

Faculty Scholarship

When tax returns were prepared with pencil and paper—in an era now gone forever—Congress did not impose income tax provisions of great computational complexity on large numbers of taxpayers, in the belief that it was unreasonable to require average taxpayers (or their paid preparers) to struggle with computationally complex provisions. As return preparation software gradually replaced the pencil in recent decades, the complexity constraint weakened and eventually disappeared. Congress has responded by imposing unprecedented computational complexity on large numbers of taxpayers—primarily through the expanded scope of the alternative minimum tax and the proliferation of phase outs of ...


University Endowments: A (Surprisingly) Elusive Concept, Frances R. Hill 2010 University of Miami School of Law

University Endowments: A (Surprisingly) Elusive Concept, Frances R. Hill

Articles

Even as certain policy makers press for mandatory payouts from endowments, the concept of an endowment remains surprisingly elusive. In the absence of either operational concepts of endowments or well-established metrics for identifying and measuring endowments, public policy discussions proceed with an implicit model of an endowment as "money in waiting" that is not currently in use for exempt educational purposes. This Article suggests that endowments, however conceptualized or measured, are better understood as "money in use" even though it is not being distributed. It argues that most endowment money is currently in use for at least two purposes. The ...


Debt-Financed Consumption And A Hybrid Income-Consumption Tax, Lawrence A. Zelenak 2010 Duke Law School

Debt-Financed Consumption And A Hybrid Income-Consumption Tax, Lawrence A. Zelenak

Faculty Scholarship

The debate between proponents of income taxation and proponents of consumption taxation has focused almost exclusively on the differing treatment of savings under the two tax bases. This is odd, given that income and consumption tax bases also differ in their treatment of debt-financed consumption. This Essay addresses the largely-ignored question of the taxation of debt-financed consumption. It contends that a strong case can be made in favor of a hybrid income-consumption tax base under which taxation is triggered by the earlier of consumption or income, so that both debt-financed consumption and saved income are included in the tax base ...


The Untold Story Of Crane V. Commissioner Reveals An Inconvenient Tax Truth: Useless Depreciation Deductions Cause Global Basis Erosion To Bait A Hazardous Tax Trap For Unwitting Taxpayers, I Katz 2009 Selected Works

The Untold Story Of Crane V. Commissioner Reveals An Inconvenient Tax Truth: Useless Depreciation Deductions Cause Global Basis Erosion To Bait A Hazardous Tax Trap For Unwitting Taxpayers, I Katz

Irwin J Katz

Facts not discussed in the Supreme Court's decision in Crane v. Commissioner (much better known for Footnote 37) reveal an inconvenient tax truth of a hazardous tax trap for unwitting taxpayers (the "Basis Reduction Tax Trap"). For seven years, Beulah Crane operated an apartment building at a loss. For that reason, the substantial amount of allowable depreciation deductions on the building produced minimal tax benefits for her. Notwithstanding the lack of tax benefits, the basis of the apartment building was reduced by the depreciation deductions pursuant to section 1016(a) (2) of the Internal Revenue Code. Under threat of ...


“Respecting Foundation And Charity Autonomy: How Public Is Private Philanthropy?”, John Tyler, Evelyn Brody 2009 Ewing Marion Kauffman Foundation

“Respecting Foundation And Charity Autonomy: How Public Is Private Philanthropy?”, John Tyler, Evelyn Brody

John E. Tyler III

No abstract provided.


Comparative Income Taxation: A Structural Analysis, Hugh Ault, Brian Arnold 2009 Boston College Law School

Comparative Income Taxation: A Structural Analysis, Hugh Ault, Brian Arnold

Hugh J. Ault

The purpose of this book is to compare different solutions adopted by nine industrialized countries to common problems of income tax design. As in other legal domains, comparative study of income taxation can provide fresh perspectives from which to examine a particular national system. Increasing economic globalization also makes understanding foreign tax systems relevant to a growing set of transnational business transactions. Comparative study is, however, notoriously difficult. Full understanding of a foreign tax system may require mastery not only of a foreign language, but also of foreign business and legal cultures. It would be the work of a lifetime ...


Avoiding Misuse Of Donor Advised Funds, Michael Hussey 2009 Widener Law

Avoiding Misuse Of Donor Advised Funds, Michael Hussey

Michael Hussey

No abstract provided.


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