Law Commons^™

Assuming Constant Uniform Income Tax Rates, A Three Bank-Account Analogy Demonstrating The Immediate And Long-Term Advantages Of The Roth Conversion, William Wang

William KS Wang

This three and a half page piece assumes a uniform constant tax rate. The essay uses an analogy to three bank accounts to demonstrate the immediate and long-term advantages of the Roth IRA conversion, including (1) a decrease in income tax, (2) avoiding required minimum distributions, (3) reduction in one's taxable estate, and (4) the opportunity to invest in stocks and enjoy the gains but avoid the losses.

Transfer Pricing And Irc Section 482, Dorothy M. Hong

Dorothy M Hong

Description of recent flux in tax treaties and case laws relating to transfer pricing helpful to those companies doing business with companies based in South Korea complying with IRC Sec. 482.

911 V. 913: How The Flaws Of The Foreign Earned Income Exclusion Could Be Corrected By A Modified Version Of The Repealed Section 913, Ryan M. Borgmann

Ryan M Borgmann

This Article addresses the use of earned income as basis for allowing a tax benefit to individuals who live and work abroad. With the exception of a short period of time in the late 1970’s and early 1980’s, earned income has been used to provide a tax benefit for United States citizens and residents living and working abroad. The reasoning for this tax benefit has always been to provide assistance for the higher cost of living and higher tax rate of living in a foreign country, yet the tax benefit has been available to every individual living abroad, independent of …

Tax Lawyers, Tax Defiance, And The Ethics Of Casual Conversation, Michael Hatfield

Michael Hatfield

Tax Lawyers, Tax Defiance, and the Ethics of Casual Conversation Tax lawyers routinely navigate politically-charged waters when a tax topic is dropped into conversation. Increasingly, however, tax lawyers are confronted with comments that undermine the authority of the federal tax system itself. These comments may take several forms, including arguments that the income tax is unconstitutional. Regardless of form, this rhetoric differs from legitimate criticisms of the tax system because it encourages non-compliance as either a moral right or a political good . In the current environment, the tax bar should take up the call to be public educators with …

Tax Lawyers, Tax Defiance, And The Ethics Of Casual Conversation, Michael Hatfield

Michael Hatfield

Tax Lawyers, Tax Defiance, and the Ethics of Casual Conversation ABSTRACT Tax lawyers routinely navigate politically-charged waters when a tax topic is dropped into conversation. Increasingly, however, tax lawyers are confronted with comments that undermine the authority of the federal tax system itself. These comments may take several forms, including arguments that the income tax is unconstitutional. Regardless of form, this rhetoric differs from legitimate criticisms of the tax system because it encourages non-compliance as either a moral right or a political good. In the current environment, the tax bar should take up the call to be public educators with …

The Effect Of Religious Affiliation And Church Attendance On State Fiscal Progressivity, Erika Dayle Siu

Erika Dayle Siu

This study finds that with minor exception, neither religious affiliation nor regular church attendance significantly affects state fiscal progressivity. Based on an examination of prevailing theological traditions within major religious groups, a viable hypothesis is that a state’s fiscal progressivity should correlate to its religious demographics to some extent, depending on the social justice beliefs of each religious group. If so, states with a greater percentage of Catholics and Jewish residents would have more fiscal progressivity; states with a greater percentage of Mainline Protestants and Historically Black Church members would also evidence fiscal progressivity but to a lesser extent; and …

A Lay Word For A Legal Term: How The Popular Definition Of Charity Has Muddled The Perception Of The Charitable Deduction, Paul J. Valentine

Paul J Valentine

In the United States there is a deeply held conviction “that taxpayers who donate to charity should generally not be subject to the same income tax liability as similarly situated taxpayers.” This innate sense about the Internal Revenue Code’s section 170, otherwise known as the charitable deduction, resonates with the Americans’ sense of fairness and creates strong barriers to curtailing its function. This same sense of fairness is tied to the perceived effects of the charitable deduction. Yet, how “charitable” is the charitable deduction and how charitable do we expect it to be? This paper argues that the discrepancy between …

Re-Thinking First Principles Of Transfer Pricing Rules, John Ja Burke

John JA Burke

This Article rejects the conventional wisdom that “transfer pricing rules” are designed either to level the playing field between Multi-National Enterprises [MNEs] and medium sized enterprises or to prevent pre-meditated tax evasion by MNEs. Rather, this Article posits that “transfer pricing rules” [TPRs] are substitutes for diminished tariff revenue, or imposed artificial mark-ups, shifting costs to ultimate purchasers, and contradicting the fundamental rule of microeconomic theory of firm maximizing profits by equating marginal cost and marginal revenue. The debate about transfer pricing now centres on tweaking the “arm’s length principle”, safe harbour rules, and advance pricing agreements. Lost in this …

The U.B.S. Case: The U.S. Attack On Swiss Banking Sovereignty, Beckett G. Cantley

Beckett G Cantley

On August 1, 2006, the United States Senate’s Permanent Subcommittee on Investigations (“PSI”), a branch of the Committee on Homeland Security and Governmental Affairs, released a report in conjunction with a Senate hearing that revealed alarming statistics regarding wealthy Americans’ love affair with offshore banking. The PSI report was a culmination of the subcommittee’s investigation into tax haven abuses, providing the most detailed look to date of high-level tax schemes. The report revealed such an alarming number of rich Americans are using offshore accounts to evade taxes that law enforcement is unable to control the growing misconduct. Senator Carl Levin …

Non- Profit Charitable Tax Exempt Hospitals- Wolves In Sheep's Clothing:To Increase Fairness And Enhance Compition All Hospitals Should Be For Profit And Taxable, George A. Nation Iii

George A Nation III

Most hospitals in the United States are not-for-profit tax exempt institutions. Legally these hospitals are deemed to be charities and are exempt from federal, state and local taxes, raise money through tax exempt bond offerings and receive charitable contributions that are tax deductible to the donors. Today it is estimated that 47 million Americans lack access to healthcare.5A Moreover, even when the new Patient Protection and Affordable Care Act5B is fully operational, which is estimated to be around 2019, there will still be millions of Americans without health insurance and thus without reliable access to healthcare.5C Notwithstanding the millions of …

All The News That's Fit To Fund: The Low-Profit Limited Liability Newspaper, Christopher J. Hickman

Christopher J. Hickman

The traditional media, specifically the newspaper industry, is in a period of significant upheaval. Newspapers are overburdened by economic hardship and the ascension of new models of news-gathering and distribution, particularly the Internet. This Note proposes that the newspaper industry's old, ineffective business platform should be cast aside in favor of a hybrid social enterprise model, specifically the low-profit limited liability company (the “L3C”). The L3C, a "for-profit with a non-profit soul," will function as both an engine for moderate profits for investors and a platform for socially conscious values in the news reporting context.

Good Deficits: Protecting The Public Interest From Deficit Hysteria, Neil H. Buchanan

Neil H. Buchanan

President Obama has come under increasingly fierce criticism for the size of the federal budget deficit, as both Democratic and Republican politicians loudly proclaim that federal spending should be cut. This article explains why such anti-deficit fervor is misguided and simplistic, and why, perhaps counter-intuitively, cutting government spending can hurt the country, rather than help it, in both the short run and the long run.

In the short run, cutting deficit spending can be disastrous to the economy, especially if the economy is already in decline. In addition, because the federal budget fails to separate spending that provides long-term benefits …

Utopian Taxation: Covering The Cost Of Living, Maurice A. Echols

Maurice A Echols

This article, “Utopian Taxation: Covering The Cost of Living,” discusses concepts of economics and tax policy with an intent to have its readers consider or reconsider what is truly valuable to them individually and to society as a whole. I discuss the overall workings of Money-Based Economies, Resource-Based Economies, and Mixed Economies with their relation to tax policy and the implications that arise or may arise within them. I believe that the concepts discussed within this article are very interesting and address new and revolving issues of people, government, and the relationships between them.

Reigning In Charities: Using An Intermediate Penalty To Enforce The Campaigning Prohibition, Samuel D. Brunson

Samuel D. Brunson

Congress has prohibited public charities from campaigning for or against any candidate for office continuously since 1854. However, the IRS routinely fails to penalize public charities that accidentally violate or deliberately flout the prohibition. And the IRS’s reluctance is understandable: the penalty for violating the campaigning prohibition is loss of the public charity’s tax-exempt status, a death-knell for many public charities. This Article argues that the IRS’s underenforcement of the prohibition is predictable. The prohibition has provoked firestorms of debate among academics, policymakers, and directors of public charities themselves. Where the penalty for violating controversial laws is a hard shove, …

Grown-Up Income Shifting: Yesterday's Kiddie Tax Is Not Enough, Samuel D. Brunson

Samuel D. Brunson

In 1986, concerned that wealthy parents were sheltering some of their income from taxes by giving some portion of their securities portfolios to their children, Congress enacted the “kiddie tax,” which taxes a child’s passive income at the child’s parents’ tax rate. By doing so, Congress intended to reduce tax-motivated income-shifting. Since its passage, however, there has been little serious consideration of whether the kiddie tax successfully prevents the targeted income-shifting.

This Article reexamines the kiddie tax and concludes that it is both over- and underbroad. The kiddie tax subjects all of a child’s passive income, not just income resulting …

Is Latin American Taxation Policy Appropriate For Promoting Foreign Direct Investment In The Region?, Hugo A. Hurtado

Hugo A Hurtado

Adoption of an appropriate international tax policy in Latin America can promote greater foreign direct investment. Latin American countries should work together on a tax integration process to give foreign direct investment a more regional approach rather than each country competing to attract its own foreign direct investment. Such intraregional competition results in lost tax revenues with no proven effect on foreign direct investment. A tax integration process would reduce the use of advanced tax planning techniques by multinational companies to take advantage of loopholes created by disparities between tax systems; however, it would also provide the foreign investor with …

A Model Of Legal Systems As Evolutionary Networks: Normative Complexity And Self-Organization Of Clusters Of Rules, Carlo Garbarino

Carlo Garbarino

The paper draws both on legal theory and network science to explain how legal systems are structured and evolve. The basic proposition is that legal systems have a structure identifiable through a model of them in terms of networks of rules, and that their evolution is a property of their network structure. The paper is based on a model of rules which relies on the tenets of the network theory to describe how legal change unfolds within the network structure of legal systems. Section 1 presents an outline of current literature on the application of network theory to legal systems. …

A Model Of Legal Systems As Evolutionary Networks: Normative Complexity And Self-Organization Of Clusters Of Rules, Carlo Garbarino

Carlo Garbarino

The paper draws both on legal theory and network science to explain how legal systems are structured and evolve. The basic proposition is that legal systems have a structure identifiable through a model of them in terms of networks of rules, and that their evolution is a property of their network structure. The paper is based on a model of rules which relies on the tenets of the network theory to describe how legal change unfolds within the network structure of legal systems. Section 1 presents an outline of current literature on the application of network theory to legal systems. …

Designing Privilege For The Tax Profession: Comparing I.R.C. § 7525 With New Zealand’S Non-Disclosure Right, Keith A. Kendall

Keith A Kendall

The United States and New Zealand are the only two common law jurisdictions to have successfully extended attorney-client privilege to non-lawyer tax advisers. While aimed at the common goal of such an extension, the two statutory rules implement very different means to achieve this purpose; the United States importing the common law into statute, with New Zealand creating a completely separate statutory right. An examination of the context and legislative histories of the respective statutory provisions finds that these forms are consistent with the legislative approach to evidentiary privileges in each jurisdiction and is, therefore, appropriate in each case. Other …

Energy-Efficiency And Wind Energy: Investment Strategy For Venture Capital And Private Equity, Nicolas L. Boittin

Nicolas L Boittin

Some renewable sources of energy are becoming economically profitable and legislatures are providing greater legal predictability for investment in this area. Many states have implemented Renewable Portfolio Standards (RPSs) and the U.S. Congress extended the investment period for Investment Tax Credits (ITCs) recently. Wind energy is the most mature renewable technology and energy-efficiency offers high profit potential in the short term. These two areas thus provide great investment opportunities for venture capital funds interested in clean technology and private equity funds focusing in renewable energy buyouts.

Personal Bankruptcy And Tax Debt: An Examination Of The Usefulness Of Chapter 13 In Managing Irs Claims, Matthew Q. Mcpherson, Donald D. Hackney, Daniel L. Friesner, Candice L. Correia

Matthew Q McPherson

The bankruptcy code has been used, with varying degrees of success, to mitigate debtor obligations for certain classes of financial claims. Taxes are a unique class of claim. The IRS, as the enforcement tool of the Federal Government’s revenue generating operations, is armed with collection powers not available to ordinary creditors. These include, but are not limited to, liens, levies, attachments, assessment penalties, and, most significantly, the power to ignore debtor homestead protections. Bankruptcy can be very valuable to a debtor caught in an active IRS tax collection. For example, filing Chapter 13 bankruptcy stops the running of interest on …

Tax First, Ask Questions Later: Problems Predicting The Effect Of Obama's International Tax Reforms, Timothy H. Shapiro

Timothy H Shapiro

The Obama Administration has proposed a dramatic reworking of the way US corporations are taxed on income they earn outside the US. Although less prominent than other Washington policy debates, these changes are no less contentious. The result is either a fairer tax system yielding the government an extra $210 billion, or the end of US-based multinational corporations, depending on who one asks. Yet both sides of the debate have opted for rhetorical simplicity over accuracy, sidestepping sixty years of theoretical scholarship on the subject. The world economy is a dynamic system, and the current projections of US companies’ reactions …

A Comparison Of The Income Tax Systems In The United States And Germany: The Rugged Individualist Meets The Social Activist, Walter Schwidetzky

Walter D Schwidetzky

There is more than one road up the mountain. Different countries find different solutions to raising revenues and taxing their citizens. The United States tends to be a bit inbred about tax policy decisions, rarely looking outside of its own borders for answers. Yet other countries may have looked at a given issue and come up with intelligent answers that could helpfully inform U.S. decisions. The converse is, of course, also the case. One of the striking things about doing comparative tax analysis is how differently, but legitimately, different countries can answer the same question. There also times when one …

Frequently Asked Questions For Taxpayers With Undisclosed Foreign Bank Accounts, Kevin E. Thorn

Kevin E. Thorn

No abstract provided.

Is The United States Tax Court Exempt From Administrative Law Jurisprudence When Acting As A Reviewing Court?, Diane Fahey

Diane L. Fahey

To maintain legitimacy and stability, a government must have access to a reliable source of revenue. Taxes are the lifeblood that sustains a government. Therefore, as far back as 1931, the United States Supreme Court has enforced the principle that the executive branch of the federal government must be unimpaired in its ability to collect taxes owed; otherwise, the government could be undermined by citizens who attempt to delay or evade their obligation to pay taxes.

Taxpayers have always been permitted to dispute the amount of their liability; however, until recently, taxpayers had little opportunity to dispute the method employed …

The Fox And The Ostrich: Is Gaap A Game Of Winks And Nods?, Arthur Acevedo

Arthur Acevedo

The fox is frequently described as sly, cunning and calculating in world literature. It is often associated with behavior that seeks advantage through trickery and pretext. The ostrich on the other hand, has been portrayed as cowardly and irrational. Its character defect is epitomized when it sticks its head in the sand at the first sign of trouble. The Financial Accounting Standards Board (FASB) can be described as the fox; the Securities Exchange Commission (SEC), the ostrich. This article examines the creation of accounting principles by the fox and the failure to govern by the ostrich. History demonstrates that the …

Are Gift Demand Loans Of Tangible Property Subject To Gift Tax ?, Joseph M. Dodge

Joseph M Dodge

The publicity surrounding a prominent political figure’s rent-free use of a portion of a friend’s house in Washington, D.C., has raised the issue of whether the rent-free use of tangible property is a gift for federal gift tax purposes. The 1984 case of Dickman v. Commissioner, 465 U.S. 330 (1984), involving an interest-free demand loan of money, intimated that such might be the case, but there has apparently been no effort by the IRS to enforce such a position. The federal gift tax will be the only federal transfer tax left standing if the estate tax and generation-skipping tax are …

Double Deductions, Or Nothing: Why The Vindication Of Beulah Crane Poster Child Of Greedy Taxpayers Should Inspire Closing The Tax Trap Left Open After Tax Shelters Were Shut Down: And Other Crane Footnotes Revealed, Irwin J. Katz

Irwin J Katz

Crane v. Commissioner is arguably the most celebrated case of any kind where a footnote of dictum is more relevant than the actual holding. It was the Supreme Court’s famous Footnote 37 hypothetical query that gave Crane its vocabulary tax law case status. For the three decades following the decision, whether the Supreme Court’s response to the query portended future judicial decisions blessing tax shelters remained an open question. Subsequently, two lower courts faced the challenge of implementing the Supreme Court’s reasoning in Footnote 37 scenarios. Without appearing to overrule the Supreme Court, the courts squelched the tax shelters by …

Mitigating The Distributional Impacts Of Climate Change Policy, Tracey M. Roberts

Tracey M Roberts

Under both a cap-and-trade system and a greenhouse gas tax, the government will regulate energy suppliers and distributors, utility companies, and large manufacturers. These parties will bear the statutory incidence of the regulation. However, the financial impacts of regulating greenhouse gas emissions will be borne primarily by consumers. Consumers will bear the economic incidence of the regulation in the form of increased costs of gasoline, electricity, and home heating fuels and in increased consumer prices for all goods manufactured or distributed using fossil fuels. Greenhouse gas regulation will also generate significant revenue. This Article addresses the question of what should …

Tax Consequences Of Shareholders' Rent-Free Use Of Corporate Property, David Elkins

David Elkins

The tax consequences of rent-free use of corporate property by shareholders have received little attention from the courts since the 1950s and even less from commentators. The Code and regulations do not provide any specific guidance, but instead rely on general principles of income tax. However, an ostensibly similar type of transaction has received a tremendous amount of attention by courts, commentators and Congress. For a generation the courts struggled to come to grips with the taxation of interest-free loans from corporations to their shareholders. The courts for the most part rejected the analogy between rent-free use of property and …