Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 2 of 2
Full-Text Articles in Law
Mandatory Tax Penalty Insurance, Michael Abramowicz
Mandatory Tax Penalty Insurance, Michael Abramowicz
Indiana Law Journal
In a mandatory tax penalty insurance regime, taxpayers would be required to find insurers to certify portions of their tax returns. A certifying insurer would be subject to a governmental auditing regime insurers of randomly selected filings would pay an amount equal to the inverse of the selection probability multiplied by the underpayment, or they would receive money from the government in the case of overpayment. The insurers function as private auditors with no incentive to underestimate their customers' tax liability. Such a regime will consume real resources, ultimately paid by taxpayers, and thus should not be imposed universally. But …
Fee-Shifting Statutes And Compensation For Risk, Maureen Carroll
Fee-Shifting Statutes And Compensation For Risk, Maureen Carroll
Indiana Law Journal
A law firm that enters into a contingency arrangement provides the client with more than just its attorneys’ labor. It also provides a form of financing, because the firm will be paid (if at all) only after the litigation ends; and insurance, because if the litigation results in a low recovery (or no recovery at all), the firm will absorb the direct and indirect costs of the litigation. Courts and markets routinely pay for these types of risk-bearing services through a range of mechanisms, including state feeshifting statutes, contingent percentage fees, common-fund awards, alternative fee arrangements, and third-party litigation funding. …