Law Commons^™

Can Blockchain Revolutionize Tax Administration?, Orly Sulami Mazur

Faculty Journal Articles and Book Chapters

Experts predict that the use of smart contracts and other applications of blockchain technology could revolutionize the manner in which we do business. Blockchain technology promises the elimination of middlemen, increased trust and transparency, and improved access to shared information and records. Thus, it is no surprise that companies and entrepreneurs are developing blockchain solutions for an array of markets, ranging from real estate to health care. But can this new technology revolutionize tax administration?

This Article is the first to consider blockchain technology’s role in addressing the shortcomings of our current administration system— namely, a large tax gap, high …

Taxing The Robots, Orly Mazur

Faculty Journal Articles and Book Chapters

Robots and other artificial intelligence-based technologies are increasingly outperforming humans in jobs previously thought safe from automation. This has led to growing concerns about the future of jobs, wages, economic equality and government revenues. To address these issues, there have been multiple calls around the world to tax the robots. Although the concerns that have led to the recent robot tax proposals may be valid, this Article cautions against the use of a robot tax. It argues that a tax that singles out robots is the wrong tool to address these critical issues and warns of the unintended consequences of …

Cloudy With A Chance Of Taxation, Orly Mazur, Rifat Azam

Faculty Journal Articles and Book Chapters

The growth of the digital economy, and, in particular, cloud computing, has put a significant strain on sales taxation and other consumption tax systems. The borderless, anonymous, and digital nature of cloud computing raises questions about the paradigm used to determine the character of the transaction and the location where consumption, and therefore, taxation occurs. From an American perspective, the effective resolution of these issues continues to grow in importance in light of the recent U.S. Supreme Court decision in South Dakota v. Wayfair and the growing number of U.S. businesses transacting overseas in jurisdictions that impose value-added taxes (VATs). …

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. …

Brief Of Amici Curiae Tax Law Professors And Economists In Support Of Petitioner In South Dakota V. Wayfair, Orly Mazur

Faculty Journal Articles and Book Chapters

While the Supreme Court is rightly reluctant to overrule its own precedents under any circumstances, the force of stare decisis is less powerful in some contexts than in others. Specifically, stare decisis exerts a weaker pull when judicial doctrine in the relevant area is based not on statutory interpretation but on changing competitive circumstances and evolving economic understandings. Antitrust law is a paradigmatic example of an area in which these conditions are met, but the argument for a flexible application of precedent is similarly strong with respect to dormant Commerce Clause tax cases such as this one.

In Quill Corp. …

The Public Service Loan Forgiveness Program: The Need For Better Employment Eligibility Regulations, Gregory S. Crespi

Faculty Journal Articles and Book Chapters

People will start seeking tax-exempt debt forgiveness under the Public Service Loan Forgiveness (“PSLF”) program in October of 2017 after satisfying the requirements of 10 years of post-October 1, 2007 employment in a “public service job.” I estimate that eventually 200,000 people a year or more will obtain debt forgiveness under this program, at a total cost to the Treasury of $12 billion/year or more. Estimates are that up to one-quarter of all employment will qualify as a public service job.

For such a large and costly program the precise eligibility criteria are crucial. The statutory definition of a public …

Will The Public Service Loan Forgiveness Program Ever Forgive Any Loans?, Gregory S. Crespi

Faculty Journal Articles and Book Chapters

There is a sharp tension between the expectations that hundreds of thousands to millions of persons have regarding their right to eventually have their student loan debts forgiven under the Public Service Loan Forgiveness program, starting this fall, and the legitimate public concerns regarding the large future costs and regressive incidence of the PSLF program’s benefits. The Trump Administration has recently proposed prospectively abolishing the PSLF program for future Direct Loans. Whether or not this proposal is adopted, given the large costs of the program (which I estimate will eventually rise to $12 billion/year or more as an estimated 200,000 …

Transfer Pricing Challenges In The Cloud, Orly Mazur

Faculty Journal Articles and Book Chapters

Cloud computing - the provision of information technology resources in a virtual environment - has fundamentally changed how companies operate. Companies have quickly adapted by moving their businesses to the cloud, but international tax standards have failed to follow suit. As a result, taxpayers and tax administrations confront significant tax challenges in applying outdated tax principles to this new environment. One particular area that raises perplexing tax issues is the transfer pricing rules. The transfer pricing rules set forth the intercompany price a cloud service provider must charge an affiliate using its cloud services, which ultimately affects in which jurisdiction …

Unilateral Climate Regulation, James W. Coleman

Faculty Journal Articles and Book Chapters

It is now plain that decades of negotiation toward a binding global climate treaty have failed. Yet, at the same time, many nations are adopting a range of unilateral policies to address climate change. The existing literature on climate policy neglects these unilateral climate regulations because it focuses on the necessity and possible design of a multilateral climate treaty. But these domestic regulations present a unique puzzle: given that climate outcomes are determined by global emissions, and that unilateral regulations inevitably influence incentives to regulate elsewhere, how can domestic action achieve the greatest marginal reduction in global emissions? In other …

Good News In A Bad Economy: Service Acquiesces On Pro-Taxpayer Application Of Passive Activity Loss Rules To Limited Liability Companies, Orly Mazur

Faculty Journal Articles and Book Chapters

After nearly two decades with no guidance addressing the correct characterization of a limited liability company’s activities under the passive activity loss rules, investors are finally receiving the answer they have patiently sought. Several courts, the Service’s acquiescence and newly issued proposed regulations have recently clarified that ownership interests in limited liability companies are not all treated as presumptively passive limited partnership interests. Instead, the more lenient general passive activity loss rules set forth in the temporary regulations are used to determine the active or passive nature of many activities. These decisions have been accurately hailed as a significant taxpayer …

The Real Value Of Tax Deferral, Christopher H. Hanna

Faculty Journal Articles and Book Chapters

A leading law professor wrote, almost 25 years ago, that Deferral of gain is not as serious as outright exemption [exclusion], but it is the next best thing, as sophisticated taxpayers and their counsel are now well aware. If exclusion is not possible, then according to the professor, the next best result is to defer paying taxes on the item of income. From a tax law standpoint, very few academics would disagree with the statement that deferral is the next best thing to exclusion.

But how important is tax deferral in the real word, particularly with respect to the Fortune …

Immortal Fame: Publicity Rights, Taxation, And The Power Of Testation, Joshua C. Tate

Faculty Journal Articles and Book Chapters

Publicity rights, or the rights to the use of one’s image and likeness, are a relatively recent form of property. Several states now recognize rights of publicity as survivable, meaning that the heirs of deceased celebrities can inherit those rights. Because U.S. law has traditionally granted each individual the power of testation, a celebrity can also freely devise the rights to persons of her choosing. Nevertheless, some scholars have recently envisioned the adoption of hypothetical state statutes under which publicity rights would pass automatically to specified statutory heirs regardless of the celebrity’s wishes. Destroying the power of testation, these scholars …

Taxation Of Supernormal Returns, David Elkins, Christopher H. Hanna

Faculty Journal Articles and Book Chapters

In the last ten to fifteen years, a number of articles have been written on the differences between a normative income tax system and a normative consumption tax system, with much of the discussion focusing on the taxation of the risk-free rate of return and the risk premium from an investment. As is generally accepted, under certain assumptions an accrual income tax system taxes the risk-free rate of return on capital but does not tax the risk premium, while a cash-flow consumption tax system (or a wage tax system) taxes neither the risk-free rate of return nor the risk premium. …

From Gregory To Enron: The Too Perfect Theory And Tax Law, Christopher H. Hanna

Faculty Journal Articles and Book Chapters

Although financial writers have been using magic terms in describing tax law (and accounting reporting), do such terms and theories really have a place in the law? This Article will show that there is a connection between magic and tax law. In a sense, tax lawyers are magicians in that they are able to structure transactions in a manner to minimize taxes, in many cases, to the complete bewilderment of their clients. Tax lawyers are constantly striving to structure transactions in ways that will withstand scrutiny from both the government and the courts. Experienced and well-informed tax lawyers know, however, …

Tax Deduction Of Hazardous Waste Cleanup Costs: Harmonizing Federal Tax And Environmental Policies, Jeffrey M. Gaba

Faculty Journal Articles and Book Chapters

The issue of the deductibility of environmental cleanup costs involves the complex and painful intersection of tax and environmental law. The basic issue is whether environmental remediation costs may be immediately deducted as ordinary and necessary expenses or whether they must they be capitalized as improvements to land. A recent revenue ruling by the IRS, Rev. Rul. 94-38, addresses a relatively simple situation but basically leaves the most difficult issues unresolved.

This article discusses whether cleanup expenses may be immediately deducted when the payments were made by the current landowner and 1) the contamination was caused and cleaned up by …

The Virtual Reality Of Eliminating Tax Deferral, Christopher H. Hanna

Faculty Journal Articles and Book Chapters

No abstract provided.